If you are self employed you may be a little hesitant to apply for a mortgage in this new landscape of tighter lending standards. You’ve read the horror stories about borrowers with “near perfect” credit, solid jobs and a significant down payment being denied for a loan, so what chance do you have a small business owner or freelancer?

At AmeriFirst we want you to know you have just as good of an opportunity to own a home as anyone else. While our solid lending standards have remained the same for the past 25 years and we analyze both numbers and scores we also delve deeply into the individual in order to put you on the right path to successful home ownership.

Borrowers who are self employed may have to jump through a few more hoops and furnish additional paperwork to provide proof of income, however knowing what to supply will take the guesswork and headaches out of applying.

Before you apply, check your credit report to ensure it accurately reflects your financial activity. Old debt and errors can negatively impact your score, so it is imperative you ensure it tells your past and current financial story. You can get a free copy of your report from all three bureaus from www.annualcreditreport.com. The free version will not give you a credit score (it’s available for a small fee), but you can at least check to make sure that the items on your report are correct.

Once you know where you stand in terms of your credit report, gather the necessary paperwork and information needed to apply. Consult with your AmeriFirst loan professional before and throughout the application process and be sure we’ve fully answered all of your questions.

If you are self employed, consider these steps when applying for a mortgage:

• Collect tax returns and W-2’s to demonstrate income and employment. Consider including a few invoices from clients and ask your clients to write a letter of recommendation, letting us know about what kind of vendor you’ve been.
• Show a consistent borrowing track record. Furnish documentation from previous loans demonstrating that you’ve made timely payments in a satisfactory manner.
• Provide a 20% deposit. Having a 20% down payment for your home provides additional proof that you can successfully manage your money.

If you’ve been on the fence about homeownership, don’t delay. Although rates have been holding steady at record lows, economists predict that an increase is inevitable. Rates and home prices are at rock bottom so now is the time to act.

We can assist you with making your dream of homeownership a reality and are ready to help. For more information about how you can get started on the application process call us at 800-466-5626 or begin the application process now.

Source: http://www.shuddup.com/featured/how-to-get-a-mortgage-if-youre-self-employed.html

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Believe it or not, amid the rigid lending standards and the number of lenders on the “up and up” there are still vultures preying on the borrower’s vulnerabilities. In this case, it’s a “safe” scam but one that may get your hopes up only to realize how easy it is to still fall victim to the old “drive by” mortgages that flowed freely a few years ago.

This “safe” scam site is called Esteemed Lending Services, offering plenty of loan services for those with poor credit. In fact, if you look closely, the site is riddled with typos which should tip off any leery borrower.

Click on one of the tabs to the left and the site is revealed as an imposter. Esteemed Lending Services is actually a site created by the Federal Trade Commission (FTC) to demonstrate how easy it is to fall victim to online lending scams. Each tab contains the warning message from the FTC, “If you responded to an offer like this one, you could have been scammed!” The copy goes on to tell the reader that Esteemed Lending Services is not a real site, but one developed by the FTC to warn consumers of predatory lenders.

The FTC offers tips backed by your hometown lender, AmeriFirst:

• Red Flag #1: a lender who is not interested in your credit history is often a scam.
• Red Flag #2: fees that aren’t disclosed or readily available are definitely a problem.
• Red Flag #3: offering a loan by phone is a scam and definitely illegal.
• Red Flag #4: the lender is not registered in Michigan (or your state)—lenders and loan brokers are required to register in the state they do business.

Better yet, instead of scanning the web, contact the loan professionals at AmeriFirst. We work closely with you to develop a personalized action plan for success. Our seasoned lenders can offer tips on how to improve your credit rating and save money for a down payment, so you can be prepared to apply for a mortgage when you are ready.

For more information about AmeriFirst or our loan programs, contact us today at 800-466-5626 today.

Reference Links:

• http://realtytimes.com/rtpages/20100722_sitetosee.htm
• http://www.wemarket4u.net/esteemed/index.html

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Remember when being in the mortgage business was considered to be a “creative” industry? Only a few years ago some lenders were getting kooky with their interest-only loans and option ARMs. At the time, borrowers thought doing business this way was “smart” but were of course proven wrong during subsequent years.

So now what? Back to the cookie cutter mortgages where you have a few small options and if your situation doesn’t gel with the establishment; too bad? Not so fast. Sure lenders, such as AmeriFirst are being (and have been ) extremely conservative and careful about mortgage loans, however having options doesn’t mean that we’re going rogue and will start providing crazy products either.

For example, the June issue of Money Magazine details specific situations where the borrower needs a loan, but doesn’t necessarily understand how to achieve his or her goals with the traditional product.

• Those who want to build equity. In the first instance, the borrower wants to build equity faster. Money Magazine experts suggest looking into a 15-year fixed-rate mortgage. Jim Pair, president of the National Association of Mortgage Brokers, says that you will accrue equity faster with a 15 year product versus a 30 year. Plus you’ll save a tremendous amount of money in interest payments over the life of the loan. The only “stick” to this theory is that you’ll pay a little more every month than with a 30 year product. If you can swing it, it might be the best deal.
   
• Borrowers on the move. Another situation relates to those who believe they will move in five years or less. Money Magazine experts believe that a five-year hybrid adjustable-rate mortgage might be your best bet. Currently the five year fixed 5/1 ARM is the perfect solution for those who don’t plan to stay in one place very long, says Rick Allen, product manager with Mortgage Marvel. The drawback with this strategy is that you can’t sell before the five-year term is up because then your rate could increase. It’s a good idea to have a nest egg of cash just in case.
   
• Wanting to buy a home without having 20% for a down payment. Finally, what if you don’t have 20% to use for a down payment on the home? The solution—the FHA loan. Because of stringent lending guidelines, it’s difficult to obtain a loan without a 20% down payment. However, with an FHA loan you can put down as little as 3.5%. It’s important to remember when you go through the FHA there is a fee of 2.25% of the loan up front, plus 0.5% a year for the first five years or until you have 22% equity in your home.

As you can see, one size does not fit all, but you can leverage traditional mortgage products to your advantage and customize them to your specific situation. At AmeriFirst, we’ll help you every step of the way and advise you on which product is most advantageous for your borrowing needs. For more information about our programs or about AmeriFirst call us at 800-466-5626.

Reference: Max, Sarah. “Find a Mortgage Tailor-Made for You.” Money Magazine. 2010 June.

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If only we had magical powers and a crystal ball to foresee the future of the housing market, but unfortunately no one does. However, we can rely upon highly skilled experts to make educated assumptions and guesses about when we are going to see the light at the end of this long, dark housing market tunnel.

Recently, Stan Humpries, chief economist at Zillow.com addressed some of the biggest housing myths, or rumors swirling around the Internet and the local water hole:

1. Hip, hip hooray, the housing recession is over! Well…not so fast, Humpries cautions. He urges Americans to look around their neighborhood and assess what is selling, what isn’t selling and how much neighbors are receiving their properties. He adds that prices are going to have to bottom out before we are going to see recovery, which he expects to occur around third quarter of 2010.
2. My home will go back to pre-recession values once the market stabilizes. Another myth that simply won’t happen. Humpries says that for at least three to four years, home values will be long and flat. He likens the recovery as being more “L” shaped than “V” shaped. He says that on the positive side, values won’t continue to free fall.
3. The worst part of the foreclosure crisis is history. Once again, poor Stan Humpries is coming out looking like the grim reaper. Nope, he says. Until the job market gets it preverbal “color back in its cheeks” the foreclosure market will remain the same. Can’t have foreclosures recede with people continuing to be out of work.
4. We can all thank tax credits for saving the housing market. While Humpries agrees that the tax credits rearranged homebuyer’s psychology and approach to home buying, in reality historically low prices coupled with a 50-year low interest rate structure is what’s keeping the housing market afloat. Also, add in FHA increasing its role and you have more eligible buyers today than you’ve had in previous years.

Here’s the good news…if you are a first time homebuyer or an investor, the time to buy is now. You’ll never stumble across a market quite like this, where the property prices and interest rates are extremely low.

Humpries says that inventory is constantly increasing providing buyers with once in a lifetime opportunity. Take these facts into consideration:

• There are currently seven to eight million homes on the verge of foreclosure
• 5.3 homeowners are waiting and ready to jump into the market
• Twice as many homes were added to the market as were sold in April
• The housing inventory numbers are the same as they were last year

One of the best ways to get in the game is to get pre-approved for a mortgage with AmeriFirst. Our expert loan officers will work closely with you so you can house hunt with that pre-approval in hand; which mean buying power for you! For more information about our mortgage programs, call us today at 800-466-5626.

Information Source: CBS MoneyWatch

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Feeling a little down in the dumps due to backed up credit card bills or a late mortgage payment? At least you aren’t a star on one of Bravo TV’s multi-million dollar franchise, “The Real Housewives.”

The show started as a spin off from the wildly popular fictional show, “Desperate Housewives” back in 2005 with “The Real Housewives of Orange County.” For months, camera crews followed the lives of overly privileged women and their lavish appetite for spending money.

The initial show’s success created a national franchise with Housewives of Atlanta, and New York City and New Jersey. The running theme throughout the shows was the same—lots of money and lots of bling.

However, how much “bling” and money do these women really have? Does art (if you want to call reality TV art) truly imitate life?

According to Zillow, many of these “housewives” have gotten into a financial pickle and are having their spending habits curbed by outside sources—such as lenders and the government.

For example, one New Jersey housewife, who travels with a rather large wad of cash in her pocketbook, is now facing bankruptcy and foreclosure on two of her three properties. On a “reported” $79,000 salary, her family debt looks like this:

• Credit card debt — $104,000
• Car payment — $1,280/month for their Cadillac Escalade
• Fertility clinic — $12,000
• Real estate — $2.6 million for eight mortgages on three homes (two were taken by lenders)
• Business investments — $5.8 million
• Phone bill — $2,300
• Home repairs — $85,600

The grand total is approximately $11 million! How did this happen? So many Americans got caught up in the whirl of living the high life several years ago and never stopped. According to a recent MSNBC article, household debt by the end of 2007 reached a record 133.7% of disposable income. The average household is nearly $10,700 in credit card debt.

Jeff Yeager, author of “The Ultimate Cheapskate” discussed with Today Show’s Matt Lauer how to avoid becoming a “Real Housewife” and live happily ever after.

The basis of his book is to live below your means instead of above—an unfortunate new American trend. He says that everyone should spend less than what their take-home pay is and save whatever they can for emergencies. Sounds simple, but is quite the opposite of what people are doing—as illustrated with reality TV shows.

He believes that Americans should spend and save money they way they did back in the early 1980’s; where homeowners would only purchase a new household item to replace one that has been worn out beyond repair. Instead, today most people simply purchase a new model or item simply because; “it’s better” or they “want it.”

Unfortunately fueling the fire of “I want” were subprime lenders. Only a few years ago, subprime lenders roamed the markets telling borrowers who clearly couldn’t afford to make monthly payments on their mortgage that they should purchase that multi-million dollar home. Today those lenders are few and far between but homeowners who bought their cheesy pick up line are now stuck with a home, most likely, in foreclosure.

AmeriFirst customers aren’t in that predicament. We’ve never been part of the underworld of subprime lending and are always honest and up front with our customers about what they can (or cannot) afford. We know that your lifestyle is more than just your home—its being able to take a family vacation, establish a nest egg and having the ability to provide the best education possible for your children. We take every aspect into consideration when it comes to mortgages so that you can live the American dream—not the American nightmare.

Sources:
Zillow: http://www.zillow.com/blog/real-housewife-of-njs-teresa-giudice-in-foreclosure/2010/06/07/

Today Show: http://today.msnbc.msn.com/id/38034916/ns/today-books/

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Buying a home can be a precarious and emotionally draining process. From the legal mumbo-jumbo to dealing with multiple personalities, buying a home for even a seasoned professional can be challenging.

However, if this is the first time you’ve purchased a home, you may be facing a few additional challenges. Since you’ve never been down this path before, you may not be prepared for the possible twists and turns. Sure, you’ve done your homework and know the “process” but do you know and understand some of the pitfalls and possible surprises?

We are going to give away a few secrets of buying your first home…tidbits of information that people don’t tell you. Leading real estate network, HGTV reveals some of the 10 best kept home buying secrets:

• Don’t buy a new car (or any big item). Three to six months before purchasing your home, don’t go crazy with the credit cards because it will affect your credit profile which will impact your loan eligibility.
• Get pre-approved for your loan FIRST. Take the extra step and get pre-approved instead of simply being pre-qualified. The difference is that a borrower who is pre-approved is one who has gone through the financial process with the lender and presents himself as a more serious buyer. Should you find your dream house during your search you can swoop in immediately with a solid offer.
• Conduct a property survey. Avoid the common pitfalls of not knowing exactly where your property line is drawn. Remember stories of one neighbor cutting down a tree only to find out it’s on his neighbor’s property? Find out before you buy so you know what you are getting.
• Don’t try to time the market. The best time to buy a house is when you are ready. You’ll lose your mind trying to time the market.
• The nicest house on the block isn’t always the best choice. If you pay considerably more than everyone else your home’s appreciation has little mobility. Dig up some comparables to ensure your home has plenty of financial growing room.
• Consider more than your mortgage payment. Just being able to afford your mortgage payment is one of the most common first time home buyer pitfalls. Budget for property taxes, insurance and homeowner dues before saying “I do” to your new home.
• …and speaking of “I do.” Remember, you aren’t dating your home. Avoid getting overly emotional or “falling in love” with the home during the home buying process. Sometimes the purchase doesn’t work out. You don’t want to be set back from finding your home because you are hung up on another.
• Conduct a property inspection. Know exactly what you are buying—the good, the bad and the ugly. The last thing you want to discover is that your new home is in dire need of a new roof or complete plumbing or electrical system AFTER you’ve signed the paperwork and own the home. Hire a qualified property inspector to determine that you are buying a jewel and not a lemon.
• Take a scientific approach to making your offer. Don’t pull a random number out of a hat, design your bid based on what you can afford and what you believe the property is worth. Check out the neighborhood and see if the neighbors are putting on additions or new landscaping.
• Take everything into consideration. Be sure that this is the community for you and your family. Even if you don’t have children, evaluate the school district—a winning school district boosts home values. Check out your neighborhood during the day and later at night to ensure this is the right place for you

Above all, consult with your lender and real estate professional throughout the process. If you have questions, ask them! That’s why we are here! If you are ready to enter the home buying process, contact AmeriFirst today at 800-466-5626.

Source:
HGTV: 10 Best Kept Secrets for Buying a Home

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