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30 03, 2019

The Fed, Interest Rates, and Bank Statement Loans

By |March 30th, 2019|Bank Statement Loans|

How does the Fed operate in today’s political climate?
Regardless of the political climate, the Fed’s hold on long-term interest rates is at best, limited. That is because long-term interest rates are set by the bond market. Exactly four times a year, the Treasury auctions off the new debt needed because Congress is spending more than it is collecting in taxes. How it works involves investors’ bids for that debt, naming the interest rate they’ll accept – and the government fills the lowest bids.

What is the Secondary Market and how does it impact the interest rates?
Bonds change hands in the the bond market (aka the secondary market) and interest rates on that debt rise and fall based on market conditions. In spite of what many believe to be true, the size of the deficit only indirectly impacts interest rates. More specifically, if investors think those deficits have weakened the U.S. economy, they’ll demand higher rates at the next auction or when they buy bonds in the open market. If however, the demand remains strong for Treasury debt, big deficits by themselves don’t have much impact on rates.

What do lower rates do to the value of the dollar?
Largely speaking, lower rates tend to lower the value of the dollar because Treasury debt is denominated in dollars. This is to say that higher rates actually boost the dollar in that they make those Treasuries more attractive to investors buying them with foreign currencies. Similarly, higher rates also tend to slow the U.S. economy, which can have the effect of weakening the dollar.

What are some alternative lending options that thrive in today’s mortgage loan market?
The surge in Bank-Statement loans is one such [...]

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19 02, 2019

FHA Down Payment Grants for 2019 Announced

By |February 19th, 2019|Down Payment Assistance|

Already in the second month of 2019, and the FHA Down Payment Assistance programs have been announced for each state. These grants and down payment assistance programs are geared to help make the mortgage process more affordable for first-time homebuyers. The rules and benefits vary from state to state so here’s the breakdown for Connecticut, Maryland, New Jersey, New York, and Virginia.
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Mortgage Assistance for Homebuyers in Connecticut

CHFA Downpayment Assistance Program: The Connecticut Housing Finance Authority (CHFA) offers a Down Payment Assistance Program (DAP) with low interest rates to homebuyers who are eligible for a CHFA first mortgage. This assistance is provided in the form of a supplementary loan with below-market interest rates.
Fairfield Homeownership Assistance Program: The Town of Fairfield in Connecticut offers a federally funded Homeownership Assistance Program to help income-eligible, first-time homebuyers who don’t have the funds needed to cover the down payment or closing costs on a home.
Hamden First-Time Homebuyer Down Payment Assistance Grant: Hamden’s Office of Housing and Neighborhood Development offers eligible applicants a First-Time Homebuyer Down Payment Assistance Grant. Under this program, qualified individuals receive up to $5,000 in matching funds in down payment assistance.
HouseHartford Homebuyer Assistance Program: The HouseHartford Homebuyer Assistance Program was created in an effort to increase homeownership opportunities in the City of Hartford. It offers low and moderate-income homebuyers down payment assistance up to a maximum of $40,000.
Statewide Downpayment Assistance Program: The Housing Development Fund and the Connecticut Department of Housing recognize that though many individuals can afford monthly mortgage payments, they don’t have down payment funds available. To help with this issue, they initiated the Statewide Downpayment Assistance Program.

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Financial Assistance for Homebuyers in [...]

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23 01, 2019

Is Down Payment Assistance Available?

By |January 23rd, 2019|Down Payment Assistance|

Typically a minimum of 20% downpayment is required for most home purchases. But, what is a potential buyer to do when cash is simply not available to them? Luckily, across the United States, the emergence of a number of key Down Payment Assistance Programs have made the dream of home buying more likely than ever.
Down Payment Assistance Programs can be administered by a local or state housing authority, a nonprofit organization, or directly through a lender. Down Payment Assistance Programs are available in one of three forms – a grant, an interest-free loan, or a debt you pay off in the future.

Who Qualifies for Down Payment Assistance?
Every state has slightly different rules on who qualifies for Down Payment Assistance but two factors that are considered include your income and the amount of home your are purchasing. Earning limits – for example, can vary from 80% of the area median income in one state but can be as high as 120% in another. Similarly, other states may only make this type of assistance to first time home buyers only.

How much of a down payment can I get?
The amount of funding available varies from state to state and the rules on how each state awards the assistance also varies. That is to say, that for some states, the amount awarded for assistance can be based on the home’s sales price or simply on a flat amount that is capped.

Does my credit matter when looking for Down Payment Assistance?
Of course your credit matters. But, these programs are designed to provide a home purchase option to folks who would otherwise not have one. Your credit worthiness is still checked and remains a factor in [...]

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23 11, 2018

High-Net-Worth and Bank Statement Loans

By |November 23rd, 2018|Bank Statement Loans|

Let’s face it. Not all borrowers are created equal. And we’re not merely talking about their credit score. The reality for today’s borrower has to account for the way modern day wealth-holders access and use their assets. The question — liquid vs illiquid — is a common if not a daily question for business owners as well as high net worth individuals.

This liquidity, that is demonstrated most often in their bank statement or other financial statements, is the latest measure by which loan specialists are determining a borrower’s likelihood for successful qualification. Traditional lending would examine things like tax documents to analyze a borrower’s income but that is not so with bank statement loans.

Net-income qualification for bank statement lending examines a minimum of 24 month bank statements in order to determine a borrower’s income. Assets can be in the form of cash in the bank, stocks, bonds, IRAs, 401ks, mutual funds, retirement accounts, so long as they are deemed consistent and sustained.

Lastly, employment and income are not required to be disclosed on the 1003. This is of keen importance to high net worth individuals because their means of wealth is not solely derived from employment that provides W2s or similar declarations and can be the result of inheritance, investment, a liquidity event, or other activity.

A bank statement loan makes sense for HNW individuals because it considers a borrower’s qualifications based on more than their tax-returns and credit score. Instead, it more accurately measures their ability for loan repayment and successful fulfillment of their financial obligations via other alternative loan qualifications.

Wondering if you qualify? Common sense lending is back. Let one of Heritage Mortgage loan specialists assist you in determining if a Bank Statement Loan is [...]

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8 10, 2018

Are Stated Income Mortgages Still “A Thing”?

By |October 8th, 2018|Bank Statement Loans|

When the Dodd-Frank Act of 2010 became the law of the land, stated income mortgages became a thing of the past. The law requires that lenders must adequately and fully document the borrower’s ability to repay the loans for which they are applying for. For borrowers, this means that they must present the lender with documents proving that they have income or the assets to repay a loan. While Stated Income Lending is no longer available, the use of Alternative Documentation Lending and Alternative Mortgage Programs are on the rise.

Bank Statement Lending is one such alternative qualification lending program featured by Heritage Mortgage. Loan programs designed for self-employed borrowers rely on the use of their bank statements, instead of tax documents to analyze a borrower’s income. In this manner, lenders examine and utilize a minimum of 24 month bank statement history to determine the self-employed borrower’s net income. This net-income qualification is used to reflect a borrower’s income after paying work related expenses and taxes.

Using that determined net-income number, the maximum loan size is then determined based on a ratio of debt to income that could go towards the amount of loan.  While traditional lending typically requires a debt-to-income ratio of 36% – 45%, bank statement loans may use ratios as high as 55% in some instances, and determined by a number of other aspects of the borrower’s profile. Similarly, while traditional lending will allow down payments as low as 3%, bank statement loan require larger down payments from borrowers, including a 1% to 2% higher interest rate over traditional mortgages.

Wondering if you qualify? Common sense lending is back. Let one of Heritage Mortgage loan specialists assist you in determining if a Bank Statement Loan [...]

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30 09, 2018

Is Bank Statement Lending right for you?

By |September 30th, 2018|Bank Statement Loans|

Alternative Income Home Loans, sometimes referred to as Bank Statement Lending is not for everyone. In the sea of qualified and stated income options available today, how do you know if this Bank Statement Loan option is right for you?

Here’s the top 7 highlights of our Bank Statement Lending Program that you should know about:
1. Bank statement qualifier must be self-employed for at least 24 months. 1099 Contract employees are OK too.
2. Self-employed borrowers qualify with gross bank deposits using 24 Months business bank statements or 24 months personal bank statements.
3. Minimum loan amount of $250K to $3M
4. 620 Minimum FICO score required. 10% down payment requires 660 FICO score. 15% down payment or greater requires 600 FICO score.
5. Available for Primary Residence (10% down) – Investment (20% – 25% down) – 2nd/Vacation Home (10% down).
6. No Manufactured Homes, No Mobile Homes, No Commercial Property
7. New Builder Homes are OK but no “construction loans” or vacant land financing is available.
How does Bank Statement Lending work?
Traditionally, lending institutions have relied on tax returns, 1099’s and credit scores to qualify lenders. Bank Statement Loans change this paradigm by examining business earnings that have been deposited into a business account and/or personal account. Using these deposits as the base qualifiers in lieu of traditional income verification methods, a whole new array of qualified lenders has surfaced.

Wondering if you qualify? Common sense lending is back. Let one of Heritage Mortgage loan specialists assist you in determining if a Bank Statement Loan is right for you. Call our offices at 800.959.4622.

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14 08, 2018

Real Estate Credit Thaw In 2018, Return Of Zero Down Loans

By |August 14th, 2018|Bank Statement Loans, Media|

Featured in WhereToGetFinance.com

It’s been a decade, since the original economic turmoil that was said to be worse than the Great Depression that occurred in 2008. There were pervasive flaws within the economy that centered around the United States’ real estate market fueled by poor financing. In 2018, ten years after our original real estate bubble the credit or financing markets are thawing. Thus, there is a return of some old practices that were common in 2008.

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18 05, 2018

How To Survive Getting A Mortgage

By |May 18th, 2018|Media|

Featured in Forbes – by Cameron Keng

The single greatest purchase you’ll ever make is likely going to be your home. The only other purchase or debt that’s comparable is probably your student loans. Buying your first home is a mix of extreme excitement and stress. The single greatest sticking point in buying a home is whether you’re going to be approved for a mortgage.

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