Mortgages
Mortgage Refinance
Personal Loans
Home Loans
Car Loans
Personal Credit
Real Estate
Home Equity

Investment Books

Mortgage Loans, Mortgage Refinancing

Refinance Now, Lowest Rates on Florida refinance - MrBillKnows.com deals with the top lending institutions in America to find the best loan programs to custom-fit your needs. Mr Bill Knows all about refinancing in Florida. Mr. Bill Knows florida refinance!

Non-recourse loan - Loans through ACAP’s lenders are non-recourse to the borrower save for typical borrower carve-outs.

Boliglån og finansiering brug friværdien - Du har nu taget det første skridt mod en bedre boligøkonomi. Og hos os kommer du i gode hænder. Med mange års erfaring fra den finansielle sektor vil vi i de fleste tilfælde kunne sammensætte en løsning, der betyder besparelser for dig.

Student Consolidation - Quickly Get Out Of Debt Now.

Offshore selskaber - Vi tilbyder raadgivning og stiftelse af offshore selskaber & trusts. Vi har et bredt udvalg og stor ekspertise.

Florida Mortgages - Let the Florida Mortgage Guide show you the right programs with our Free CD and workbook.

Home Equity Loan Lowest Rate - Home Equity Loan directory to quickly find the Equity Loan that can offer the lowest possible interest rate. Home Equity Loans are the lowest possible interest rate, and interest may be tax deductible.

Mortgage Marketing, How To be A Loan Officer - Make money in real estate as a mortgage loan officer. Free mortgage marketing tips and stragegies.

Refinance Mortgage Rate - Consider refinancing your mortgage. Lower interest rate, consolidate your debts, shorten loan term, switch from adjustable to fixed mortgage rate. Take advantage of your home equity.

Arizona Home Refinance - Arizona mortgage broker located in Glendale Arizona. Refinance your home.  Quick closings and excellent rates on all mortgage programs.

Car Finance - Motor Car Loans provides UK and US residents with information on buying that Dream Car.

Personal Injury UK - Personal Injury information, Personal Injury Lawyers Directory and Information on how to make a claim.

For advertising information see Linknet Promotions. Get your text ad on hundreds of pages, including blogs and articles distributed on many websites.

Mortgage Lending "A through D"

by Martin Lukac

What was once a small segment of residential lending is now becoming one of the fastest growing areas in mortgage banking. Nearly every major institution is entering the non-traditional lending market. These lenders are providing loans to borrowers that do not meet the traditional credit criteria of secondary market investors such as the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC). Some issues preventing borrowers from meeting these criteria are bankruptcies, defaults, foreclosures and chronic late payments on credit obligations. This article will review the salient points of non- traditional mortgage lending.

Credit Grades. Non-traditional mortgage lending is categorized into credit grade categories based upon credit and capacity to repay the mortgage loan. Those categories are A-, B, C and D. The more serious the credit problems, the further the grade decreases. As the grade on loans decreases, lenders generally assess higher rates and fees.

Several factors contribute to the credit grade on non-traditional lending such as past consumer credit history and mortgage payment history. Generally, lenders review the credit history for the past 12- 24 months.

Income Ratios. Besides credit considerations, non-traditional lenders review the capacity of the borrowers to repay the mortgage obligation. Lenders calculate a ratio (debt ratio) using the total monthly debts and the total monthly income. For example if a borrower has a monthly income of ,000 and a total monthly debt obligation (including housing expenses and other consumer debt) of ,000, the debt ratio would be 33%. If a borrower has a low debt ratio, the grade will be higher. Conversely, if a borrower has a high debt ratio, the grade will be lower.

Income Documentation. Non-traditional lenders use three approaches in documenting a borrower's income: Full documentation, easy doc/simple doc and no income.

1. Full Documentation: Borrowers provide pay stubs, W-2s or federal tax returns for self-employed. Generally lenders require a two-year history to substantiate the borrower's income.

2. Easy Doc/Simple Doc: Borrowers provide bank statements to substantiate monthly income.

3. No Income: Lenders use the stated income from the loan application and the borrowers do not have to provide any documentation to substantiate the income. This type of loan is known as the "No Income Qualifier".

Lenders will assess a lower grade on loans when little or no documentation is provided to substantiate the borrower's income.

Loan-to-Value. Non-traditional lenders adjust the loan-to-value ratio as a method to reduce the risk of financial loss if a borrower defaults and there is a loan foreclosure. Most lenders believe borrowers with a low loan-to-value ratio have a lower probability of a foreclosure than a borrower with a high loan-to-value ratio. In cases where a borrower has a low credit grade and/or little income documentation, lenders may reduce the loan amount.

Loan Programs. There is little difference in the loan programs provided by traditional and non-traditional lenders. There are 30 and 15 year fixed mortgages, balloon mortgages, and Adjustable Rate Mortgages (ARM's). Non-traditional lenders assess higher rates and fees when there is a lower credit grade, a lack of income documentation or a high loan-to-value ratio.

Some industry experts believe one out of eight loans are non-traditional. As this market expands, competition in the non-traditional mortgage market will produce better rates, loan programs and terms.

Linknet Article Pages
Real Estate & Finance - Real Estate  |  Real Estate Resources  |  Loans  |  Personal Credit  |  Structured Settlement  |  Insurance  |  Car Insurance  |  Finance
Leisure & Health - Leisure  |  Health  |  Golf  |  Golf Travel  |   Online Degree  |  Career Education   |  Tokyo Marui  |  Online Gambling  |  Online Shopping  |  Travel
Business - Business Opportunities  |  Coaching  |  Work at Home  |  Business Services  |  Franchising  |  Affiliate Marketing  |  Marketing   |  Creative  |  Trade Shows  |  Print & Publishing
Internet - Web Tools  |  SEO  |  Link Exchange  |  Web Design  |  Web Directories  |  Blogs  |  Power Linking
Society -   US Affairs | News

This article is also reprinted in the Linknet Real Estate Article Library.