3 Mortgage Refinancing Choices for Bad Credit Individuals

June 9, 2021 by Mitch Stam

Considering mortgage refinance for financial emergencies, debt consolidation, and interest rate adjustments can be a good option, but you may not think so if you have bad credit. After all, most lenders often look for good credit reports and scores that don’t have too many risks. However, this is just a misconception because there are considerable options available in the market.

Mortgage refinancing can be a tough call to make, and you should take extra caution before opting for them since they may affect your savings, housing equity, and other assets. To consider your options and compare outcomes, refer to the following:

Mortgage Refinancing Options If You Had a Bad Credit Score

FHA streamline refinancing. Opting for FHA streamline refinancing is a good option for those with FHA loans and wish to adjust the monthly payments permanently. Bad credit individuals can go through this program, but they have to meet the average credit score for FHA borrowers, which is updated yearly by the Department of Housing and Urban Development. Just take note that this is not a cash-out refinance option, so consider other options when necessary. One of the main benefits of FHA streamline refinancing is it can have a faster turnaround rate and less paperwork since the lender has no need to do an income verification, credit checks, and high-cost appraising. You can also get some of the upfront mortgage insurance premium as a refund, provided that you refinance within the three-year period when your current FHA loan closes. Consult with mortgage professionals to determine if this option is the best for your situation.
USDA streamlined assistance program. Much like its FHA counterpart, the USDA Streamlined Assist program is another mortgage refinance option for those with bad credit since there is no credit review and even no house inspection needed. Best of all, you don’t have to worry about your debt-to-income ratio, which is a huge factor for many mortgages. As an alternative, they after those with USDA loans or mortgages backed by them. Note that only those who made a year’s worth of timely payments qualify for this option. Also, there should be a 50 dollar net reduction or tangible benefit to acquire this mortgage refinance option, so you should be prepared for that.
Portfolio refinance loans. Portfolio loans are mortgage refinance options that have set guidelines by brokers and other financial institutions. Some of them do have bad credit-friendly programs, but you have to meet their requirements. The good news is most of the eligibility criteria are more flexible than other loans, and you can get more leverage if you work with a reliable mortgage company that provides a range of portfolio loaning programs suitable for your financial needs. On the downside, you do have to present your credit report and finances before getting approved for portfolio refinancing. If the lenders fear losing money upon receiving your documents, they can reject your application. It would be best to work with a trustworthy mortgage company with plenty of connections to find the right refinancing program.

Conclusion

Mortgage refinancing can be the right thing to do, even if you have bad credit. It is just a matter of exploring your options, checking your eligibility, and comparing interest rates. Meanwhile, if you are having trouble deciding on all of the choices mentioned above and want to find the most appropriate solution for your current situation, work with the experts like our team!

Apply For a Mortgage Today at Desert Springs Mortgage LLC

Are you looking for a professional mortgage company in Phoenix to help you with your refinancing options? Consult with us at Desert Springs Mortgage LLC. We can offer you full-service brokerage services, allowing you to free up your financial resources while keeping your housing assets in check. Contact us today at (623) 432-1309 for more information about our bad credit refinance options and other concerns.

VA Home Loans Assumptions: 3 Things You Should Know

June 2, 2021 by Mitch Stam

Qualifying for a VA loan is a wonderful privilege, especially if you’re not in the best financial standing to get approved for a conventional loan. However, not everyone knows what it is and how it works. If you’re not familiar with its different processes, you can miss out on incredible opportunities to save on your finances. For example, not all home buyers are aware of the VA home loan assumption clause.

What Is a VA Home Loan Assumption?

Once you opt for a VA home loan to pay for a property, the future buyers can start paying your outstanding mortgage without creating a new arrangement. This makes a smoother transition of ownership while allowing your buyer to purchase the real estate from you sooner. However, this process isn’t as clear-cut and simple. This is why it’s vital to understand what VA home loan assumptions are.

In this article, we’ll share three things you should know about VA home loan assumptions.

Compatibility with Lenders. Since different lending companies have their own policies concerning VA loans, your specific mortgage lender may not allow an assumption to future buyers. Some companies keep applications under pending lender approval to aid this process if a prospective buyer qualifies for the payment amount. Generally, anyone can assume the mortgage you currently have on a property, whether they’re qualified under the classifications of VA loans or not. This means civilians can assume your loan, allowing you to expand your buyer market.
Necessary Prerequisites. A buyer who will assume your VA loan from you needs to take on all mortgage terms you’ve signed on with your current lender. Additionally, they need to present a 12-month history of consistent mortgage payments. Besides consistency in repayments, they must also fit your specific lender’s financial benchmarks. This includes income records, credit history, and debt-to-income ratios. The prospective buyer must also pay a funding fee of around 0.5% of the current loan balance. These are just some of the prerequisites a buyer needs to follow.
Potential Selling Points. As a homeowner, the benefits of securing a home loan don’t just stop with your mortgage plan. Since all homes are potential investments, you need to realize the advantages of VA home loan assumptions with your marketing strategy. Although not all US citizens can qualify for a VA loan, others can reap the benefits of those who plan to sell their homes through a VA-backed mortgage plan. A buyer who wants lower interest rates can benefit from the locked rate you’re benefiting from now. If they opt to assume your loan, the buyer must follow the exact terms of your existing loan, including the years remaining and interest rates set during your initial negotiations with the lender. Additionally, the buyer won’t have to pay for an origination fee and appraisal since the property is still technically under your obligation to repay.

Conclusion

Although VA loans are government-backed mortgage plans, private lenders will have different restrictions and policies for applicants. While it will still maintain the clauses above, each one will have unique benefits and advantages, depending on which vendor you choose. This is why it’s necessary to look for a mortgage lender that can guide you through the process of securing a VA loan.

Apply For a VA Loans in Phoenix, AZ

At Desert Springs mortgage, our team is dedicated to helping our clients finance their dream homes. If you need a VA loan in Phoenix, AZ, our professional mortgage experts can assist you throughout the entire process. Call us today at (623) 432-1309 for all your financing concerns.

3 Questions to Ask Yourself Before Applying for a Mortgage

May 28, 2021 by Mitch Stam

With lower rates, higher demands, the need for increased action, and home prices inching closer to all-time-lows, it’s clear that the U.S mortgage market is seeing more action than ever. Thanks to the fact that buying power is much higher than ever and the range of available listings grows each day, it’s easy to see why so many people are buying homes than ever before.

Now that you’ve saved up more money due to the time you’ve spent at home over the past year, you’re probably thinking about investing in another property since you have more financial room to work with. Mitch Stam of Desert Springs Mortgage quoted “Scooping a dream home for a bargain price isn’t a type of “walk in the park” process because there are different decisions to make.”

Fortunately, you can cash in on the opportunity-abundant real estate market in this mortgage climate and still have an easy-peasy experience by asking yourself the right questions before applying with Desert Springs Mortgage!

A Few Questions To Ask Yourself Before Applying

Today, when you buy a home with an unbeatable price and highly competitive rate, there are all sorts of factors that come into play and affect the kind of experience you have. However, you should understand that asking yourself the right questions is crucial to ensure a smoother closing process because it sheds light on key considerations you’ll need to make. If you want to get a desirable property at a competitive price and rate without unwanted troubles, here are some questions you should ask yourself before applying for a mortgage:

How Good is My Credit?

Before you even start looking at the different listings on the market and weigh out your options, you must first check your credit reports before making such a significant purchase.

The main reason it’s vital to analyze your credit before applying for a mortgage and buying a home is that the rating itself affects what you can buy, what kind of terms you can get, and the overall rate that you can enjoy. Once you have a clear idea of what your credit score or rating is, you’ll be able to:

Determine whether you’re eligible to apply for a mortgage program that you want
Understand whether it’s best to apply for a mortgage now or wait for another opportunity in the future
Know if you should spend more time improving your score and how much time you have to do so based on fleeting market opportunities

Do I Have The Necessary Documents?

It may seem overly simple now, but having the right documents is a bigger priority than most homeowners expect because it makes or breaks the ability to close a deal fast. Considering that even one or two missing papers can thwart your eligibility for a mortgage loan and a property, it’s best to double (or even triple) check the list of documents needed for your application so that you don’t run into delays!

Am I Pre-approved With a Trustworthy Mortgage Lender?

Speaking of being prepared and eligibility, another question that you should ask yourself has to do with pre-approval. You see, closing a home once the opportunity arises is a rather fast-paced process because there are many buyers acting quickly on whatever opportunity arises. By ensuring that you’re pre-approved (or taking steps to do so if you aren’t), you can secure any property that you set your eyes on as soon as possible!

Home Buying in Phoenix with Desert Springs Mortgage LLC

When it comes to cashing in on today’s opportunity-abundant real estate market, it pays to have the right mortgage to help you secure the necessary funding for your new home. But before you go ahead and apply for a loan at your local lender, it’s vital that you ask yourself the three questions mentioned above to have a smoother experience moving forward!

We are a mortgage company in Phoenix that offers the best alternatives for mortgage payments. If you are looking for reliable solutions, we’ve got you covered with highly-rated financial assistance options available. Give us a call today at (623) 432-1309 for a free home purchase qualifier!