Home Loan Financing Strategy, Affordable Mortgage Loan, No Income Proof

Increasing home loan options have greatly extended the alternatives available for homebuyers. Today home loans or mortgage loans are much more flexible and affordable, helping borrowers to not only maximize their buying power but also save money for repairs and improvements. Additionally, homebuyers can get a home loan with little or no income verification or even buy a home with little or no down payment.

Ways by which you can take advantage of the expanding loan market to secure the best financing available today.

§          Prequalifiers
§          No-income verification loans
§          80/10/10 combinations (80% 1st mortgage, 10% down, 10% 2nd paid by lender or seller)

Purchase prequalification
At Castle Mortgage Group, we can pre-qualify you as a borrower without specific property information. We use your loan information for underwriting and include your employment information, asset information, and credit history. We can then pre-qualify you as a borrower, which is subject to a maximum loan amount, down payment, and interest rate.

Prequalification for a home loan is critical since most realtors and lenders are unwilling to accept offers from buyers unless they are pre-qualified for a home loan or mortgage. This is where prequalification becomes indispensable. By going through a simple loan process prior to signing the purchase contract, all of the obstacles to borrowing can be eliminated. Once the loan is approved, the real closing of your home loan will be quick; subject only to a satisfactory appraisal and title report on the home.

Make some assumptions about your purchase price, loan amount, and loan program. Note that these assumptions are liable to change once you have found your home, but it helps you to:

§          Complete your application for the maximum tenure and purchase price that you would like to go for. We can always change these for you later.
§          Get your loan approved at an interest rate that is somewhat higher than what you expect to get. Again, we can always change it later.

Pre-qualifying your home loan ensures that your home-buying process goes smoothly once you have located the perfect home.

‘No income verification loans’
"Light documentation," "no-income verification" and "quick qualifier (QQ)," loans are aimed for buyers whose sources of income are widely distributed and hard to verify. These type of home loans are typically used by self-employed borrowers who have difficulty verifying all of their income, or by borrowers with very complex income structures. On applying for such a home loan, a borrower can simply state income on the application, and the lender will use this stated income to qualify the loan.

Note that no income verification loans are charged at a slightly higher rate of interest. This is how lenders cover the additional risk. However, before lending a no income verification loan, lenders verify that the borrower has assets that logically match the stated income and an excellent credit record.

Avoid mortgage insurance with 80/10/10 financing
You can purchase a home with a combination first and second mortgage. This way you can avoid paying mortgage insurance. In such cases, the first mortgage would be limited to 80% of the home's appraised value while the second mortgage would provide for the difference between the home's purchase prices, less the 80% first mortgage, less the down payment available.

For example, if you have a 10% down payment available, the first loan would provide for the 80% mortgage with a second mortgage of 10%.

You can also find a lender who offers self-insured home loans to avoid incurring mortgage insurance payments. Self-insured home loans typically have a higher interest rate in place of the private mortgage insurance premium.

Prior to deciding which type of home loan or mortgage you decide, you should take into account the combined monthly payments of the various options, adjusted for the tax benefits of interest deductions.