By Troy Corman, www.t2realestate.com
Below is a quick interview with long-term Dallas mortgage broker, Les Tuttle, http://www.facebook.com/#!/LesTuttleHomeLoans. We cover today's lending environment, and how to take advantage of the most affordable home buying era we may ever see.
Troy Corman: "Les, a lot of folks think it's hard to qualify for a mortgage now. Can you tell us what you're seeing in the trenches - and is lending starting to loosen up?
Les Tuttle: "We are getting qualified borrowers approved every day so people that think they might not be qualified need to call and get pre-approved. They may be pleasantly surprised. The qualifying guidelines have gone back to the way they were prior to the "everyone can get approved days". This means you have to verify your income, verify your funds for a down payment and have a minimum credit score of 620. Our minimum credit scores for FHA and VA is 620 and the minimum score on conventional loans vary based on how much money you put down. With 20% down you can still get a conventional loan with 620 scores."
Troy Corman: "That's encouraging news Les! Next question. What determines a home buyer's interest rate on his/her loan? And why do conventional loans have higher interest rates?"
Les Tuttle: "Credit scores and amount of your down payment determines what your interest rate will be. FHA and VA loans pricing is based on credit scores. On FHA and VA loans, a borrower with 620 credit scores still qualify, but their interest rate will be higher than a borrower with 640 scores. Likewise, a borrower with 640 credit scores will pay more than a borrower with 720 scores."
"The pricing on conventional loans is more complicated. Pricing is based on credit scores and the amount of your down payment. The lower the down payment, the higher the rate - even with excellent credit scores. In this case, if credit scores are average, the pricing will go even higher. It's important to work with a mortgage planner you can trust so they can help you get the best loan available - based on each borrower's unique circumstance."
Troy Corman: "Next question, Les. Personally, I have been self-employed for a while and it always seems like there are different rules, if you aren't a regular employee. What do the self-employed or contractors have to expect, when applying for a home loan?"
Les Tuttle: "Actually the rules for a self-employed borrower are the same as a "regular employee". They have to have the same minimum credit scores, they have to prove they have funds for a down payment, and they have to prove they have enough income to qualify for the mortgage payment. The difference is in how we determine your income. As a general rule, a regular employee has no expenses where a self-employed borrower can write off expense."
"Since a regular employee has no expenses, their qualifying income is the same as their gross income. The qualifying income for self-employed borrowers is their gross income minus the expenses they write off. This gives us their net income. In addition to this, there are some non-cash deductions that can be added back to income. It is very important to deal with a mortgage professional who knows how to compute income for self-employed borrowers. If you don't have an expert, you will ultimately waste a lot of time."
Troy Corman: "Are there any loans out there that provide $0 down mortgages for home purchases?"
Les Tuttle: "Yes, there are two types of loans where you can have no down payment. VA loans allow no down payment and USDA loans allow no down payment (or 100% loans). If you are a qualified veteran, this is an excellent program. The USDA (United States Department Of Agriculture) mortgage program will lend 100% if the property is located in an approved location and if your income does not exceed a certain amount. This is an excellent program. You can contact me to find out if the property and your income qualify for this program.
Troy Corman: "Next question. What should I be doing to prepare in advance if I'm thinking of buying a home in the near future?"
Les Tuttle: "Be sure to check your credit to insure there are no surprises. Make sure you make all your payments on time. And save money! Even if you have a 0 down loan, having cash is important - for the loan process and for yourself."
Troy Corman: "Final question, Les. Are there any do's and dont's I should keep in mind if I've made an offer on a house, and my loan is in process - before I've actually closed on the home?
Les Tuttle: "Here are the do's:"
"A. Keep all information concerning any deposit other than payroll checks."
"B. Be prepared to provide most recent pay stubs and bank statements if the statements you provided are not the most recent."
"C. Be prepared to explain any inquiries that appear on your credit report."
"D. Realize that the name of the game in the mortgage business today is "prove it". Be ready to document everything."
"E. Be completely honest on your loan application and loan process."
"Here are the dont's:"
"A. Don't purchase anything on credit."
"B. Don't quit your job."
"C. Don't change jobs without discussing with your lender."
Troy Corman: "Thanks for the great information Les! How can folks get in touch
with you if they need help or have additional questions?
Les Tuttle: "Here is a list of how you can contact me:"
A. Office phone 214-221-4008
B. cell 214-727-1532
C. email: ltuttle@cenderafunding.com
D. Blog: www.realestatemarbles/lestuttleblog
E. website: www.lestuttle.com
F. linkedin: http://www.linkedin.com/in/lestuttle
G. facebook: http://www.facebook.com/#!/LesTuttleHomeLoans
"Thank you!"
