Budgeting Your Project

The Way to Get Prequalified for a Mortgage

Prequalifying for a mortgage does not mean you will automatically be entitled to a loan, but it can get your home hunt began on the ideal foot. When you prequalify for a mortgage, then you take a list of your own income, debts and assets and send them to your prospective creditors. This gives creditors the information they want to evaluate your program before you have a deadline and gives you an notion of what price range you can afford. It also shows lenders you are financially responsible enough to assess your finances before shopping for a home and may speed things along when you make an application for real.

Visit your lender branch or site and ask for a prequalification form. For instance, Bank of America’s site provides an internet prequalification form it asserts it is possible to fill out in under 10 minutes.

Fill in the shape. Prequalification types vary, but creditors will often ask for your address, purpose of your loan, purchase time period, amount you plan to borrow and the type of property you need to purchase. You will also need to offer a history of your employment and evidence of income.

Authorize your lender to perform a credit rating. The Fair Credit Reporting Act requires creditors to ask customers to provide a credit report authorization and release before running a credit rating.

File your application. Online applications may get a response in minutes. Other programs may take weeks or days to get a response.

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How Can I Bid on a Foreclosed House?

When a homeowner can’t make his mortgage payment, then the lender could take the home back, a process called foreclosure. The house is then put on the market, sometimes at a cost substantially lower than market value. This makes foreclosed houses attractive to both consumers and investors looking for a bargain. Although there may be more competition and there are no warranties that the house is free of defects, the procedure for bidding on a foreclosure isn’t terribly different from that of purchasing any other home.

Find a lender and apply for a mortgage, unless you will be paying money for your home. Your creditor will advise you as to what documents you want to present to your underwriter. These typically include copies of tax returns, bank statements, pay stubs and also a list of your debts and the amount paid on them every month.

Hire a realtor. Most lenders will only entertain bids presented by accredited real estate agents. Consult your lender for a referral to someone she has worked with and urges.

Decide on a foreclosure home you want to buy and have your property agent compose the bidding. If the house is fresh to the sector and appears to be a fantastic bargain, bear in mind that you may be competing with investors, therefore make your best and highest offer and allow it to be subject to performing an inspection of the state of the house. If the house has been sitting on the market for a while, it’s either overpriced or there are significant defects. A lower offer would be appropriate under these conditions.

Prepare yourself to cover an earnest money deposit to follow your purchase agreement. The amount of the deposit varies by area, and your realtor can advise you on this. Some lenders just provide you a few days until you will be required to forfeit the deposit should you not obtain the house, so make sure you schedule all inspections immediately.

Hire a licensed contractor or home inspector. If the house has been on the market for more than a month, then have the review done before you place the offer. Most foreclosed houses are sold within an as-is condition, and the bank will not cover any repairs. It is a great idea to know the area of any work that should be done so you can cost your offer so.

Request that your broker submit your bid and wait word from your bank as to whether it’s accepted.

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What Will Boost Home Equity?

One of the primary advantages of owning a home is the chance to construct equity. Equity is the portion of house which the owner has already paid off, or the gap between the property’s value and the owner’s overall debt into the mortgage lender. On the path to 100 percent equity, in which the homeowner owns the house , building equity may be a large advantage in handling personal finances and profiting from a home sale.


Homeowners have plenty of reasons. More home equity means the chance to borrow more money with a second mortgage in the form of a home equity loan or a home equity line of credit. These loans offer money for funding home improvements, paying medical bills, funding a child’s education or buying consumer products like a new car, boat or RV. Home equity allows the owner put that money toward a house or retirement savings and to gain more from selling the home.

Down Payment

Upon buying a house, the first down payment that a mortgage borrower earns is the very first step toward building equity. A typical 20 percent down payment gives the borrower just 20 percent home equity, which is measured as 20 percent of the house’s fair market value. A larger down payment means more equity, and may also reduce monthly mortgage obligations.

Mortgage Payments

Each mortgage payment that a homeowner earns includes a portion of the principal of their loan and interest that accrues every month. The primary part goes toward building equity equity, and with every passing month the homeowner has slightly more equity. Making double payments may speed up the process and cause more equity faster. Homeowners who have an interest-only mortgage lose the chance to construct equity, since they briefly only pay interest in order to maintain payments at an affordable level.

Home Improvements

Anything that increases the value of a house also increases the owner’s equity. This is home improvements could be such investment. Homeowners who invest in regular maintenance, together with other jobs like improvements and renovations, are helping to boost their equity while at the same time making the home a more enjoyable place to call home. Landscaping, new fittings and adding energy-efficient appliances boost home values and increase the owner’s equity.

The Real Estate Market

Finally, the real estate market itself may cause large changes in home equity. The supply of homes on the market and the demand from home buyers may drive home worth up or push them down. When mortgage rates are low, more buyers may be in the current market, which may lead to home values to rise and current owners to gain equity. Improvements in a neighborhood or area that make it a much more appealing place to live could have the exact same effect on a local level.

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Historical Rate of Mortgage Foreclosures

1 significant gauge of the housing market is that the foreclosure rate: the number of homes at foreclosure expressed as a proportion of the entire stock of privately owned houses. This speed is often quoted in economical reports to show the condition of the housing market and the general U.S. market. The more complicated the foreclosure rate, the more serious an economic recession, if one exists. However, researchers should approach historic comparisons with caution.


Foreclosure rates of the late 2000s are often compared with people of the Great Depression, that happened during the first half of the 1930s. But, there were not any public or private agencies keeping tabs on foreclosure prices at that moment. Indeed, the government still does not keep an official statistic on the number of homes at foreclosure or repossessed by lenders and banks. Rather, the generally accepted amounts on foreclosures are retained by the Mortgage Bankers Association.

Current Foreclosure Information

The MBA, a national association that represents the mortgage banking industry, has monitored foreclosures since 1990. Current information on foreclosures and mortgage delinquencies are seen at the agency’s Web page,”Economic Outlook and Forecasts.” A wealth of research, predictions and remarks are found through the hyperlinks provided on this page.

Depression-Era Information

A 2008 post by David C. Wheelock, an economist at the Federal Reserve Bank of St. Louis, mentioned yearly reports issued by the Federal Home Loan Bank Board throughout the 1930s. These reports reveal the foreclosure rate exceeded 1 percent from 1931 until 1935. In the bottom point in the Depression-era economic crisis, in 1933, about 1,000 home loans were being placed in foreclosure by banks every day.


Another important source of foreclosure data is RealtyTrac, a prominent California-based organization that reports present amounts. The data cited comprises the monthly number of new foreclosures, the monthly number of foreclosures offered and the average selling price of foreclosures. The present statistics are contrasted with those of the last month, or using the same month in the last year, to establish the tendency.

Default Rate

Another measure of the health of the home market is that the speed of loans in default. Such loans are 90 days in arrears, but the houses they secure are not yet in foreclosure. As mentioned by Wheelock, a poll by the Department of Commerce found that 43.8 percent of houses in 22 urban areas were at default. For houses with a second or third mortgage, that this rate had reached 54.5 percent. In contrast, the default speeds throughout the subprime crisis of the early 21st century reached a peak of around 3.6 percent of all residential mortgages.

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FHA Seasoning Guidelines

Federal Housing Administration (FHA) seasoning guidelines pertain to the buying and selling of homes. The best example is a house that is bought by an investor and then sold to someone who is using an FHA-insured mortgage to purchase it. Seasoning itself is the waiting interval between the time when the house was purchased and when it might be offered to a buyer using an FHA-insured mortgage. Furthermore, private lenders might also have their own seasoning requirements.


FHA seasoning guidelines were put in place to help buyers buying a house that’s been”flipped” by an investor. Flipping is the procedure of buying a house and then quickly turning it about for resale at a higher price. Specific guidelines which regulate flipped houses and if they can be offered to buyers using FHA-insured mortgages are located in the Code of Federal Regulations, Title 24, subsection 203.37per month (b)(2).

Time Frame

FHA seasoning rules try to prevent abuse of the flipping process, mostly by shareholders. Specifically, they require that a house needs to be owned at least 90 days before it can be sold to someone using an FHA-insured mortgage. Exemptions, of course, also exist. For example, real-estate owned (REO, or bank-owned) or foreclosed properties being marketed do not have to fulfill seasoning guidelines. Almost all other houses, however, are subject to the 90-day waiting interval.


Many investors believe that their actions are unfairly punished by FHA seasoning requirements. Certainly, a couple of bad apple investors have a tendency to spoil the game for everyone. Before, they’ve taken advantage of over-eager buyers employing FHA-insured mortgages. For instance, some have been put into houses that had inflated evaluations and weren’t worth what they offered for. Requiring a 90 day time interval between purchase by one buyer and sale to another is believed to help lessen such activities.


With housing markets across the country more volatile than the FHA has introduced waivers to the seasoning procedure. In reality, the 90-day requirement was suspended, as of summer 2010, in an attempt to reduce the amount of houses sitting unsold on the market. This is only for 2010, although the FHA guarantees to inspect the market and decide whether to expand the suspension for future years. REO and foreclosed properties will continue to be exempt, however.


Waivers of the seasoning requirement have to be justified if the house sells for 20 percent more than its acquisition price. In this aspect, the FHA will require that the lender making the FHA-insured loan supply evidence behind the price growth. This might be in the form of repair bills and the like. The lender has to pay for an FHA-specific property review and supply it to the buyer prior to the closing.

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FHA & PMI Rules

It’s easy to become confused by Federal Housing Authority (FHA) insurance requirements concerning Private Mortgage Insurance (PMI). An FHA loan is in fact just a conventional mortgage loan guaranteed by the FHA, which is a federal agency operating under the U.S. Department of Housing and Urban Development (HUD). Interestingly, though, although the FHA provides insurance to the mortgage creditor, the FHA also requires borrowers to purchase PMI.

FHA Insurance

To clear up the confusion, the FHA does not actually require borrowers to purchase PMI from a traditional, personal PMI company. Instead, the PMI a borrower pays actually goes directly to the FHA. The FHA is your insurance company. Sothe PMI payments you make actually cover your FHA insurance on your loan. In exchange for your PMI payments, the FHA guarantees to lenders when the lender forecloses, then the FHA will purchase the house for the complete value of the mortgage loan. The FHA requires PMI payments for as long as you’ve got less than 20% equity in your property. Since many FHA borrowers only supply the minimal 3.5 percent down payment, most borrowers should pay PMI.

Closing Prices

The FHA requires two kinds of PMI premium payments. The first is that a sizable premium payment that the borrower must pay at the time of closing on the mortgage loan. Before 2010 the FHA required an initial PMI payment equivalent to 1.75% of the whole loan amount. However, as of 2010 the FHA increased that initial payment to 2.25 percent of the entire loan amount. However, borrowers who take part in a FHA-approved”HELP–Homebuyer Education Learning Program” can qualify for the elderly 1.75 percent premium payment.

Monthly Premiums

The second type of PMI premium payment required by the FHA is monthly PMI premium payments for as long as the borrower has less than 20% equity in the house. If your house has increased in value as closing, then you may have a current appraisal performed to prove that you now have 20% in the house. Until that happens, the FHA requires monthly payments equivalent to 1/12 of 0.5 percent of the entire loan amount.

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Guest Picks: 20 Color-Happy Dining and Kitchen Accessories

With the arrival of summer, I feel like my kitchen needs a jolt of color to bring it back into life and prepare for a period of parties, barbecues and warm, lazy evenings spent sipping cocktails. These neon accessories will make your kitchen enjoyable to work in, although not just more pretty. From handy accessories like silicone spatulas and dishwashing brushes to warm towels beautiful enough to be hung on the wall, those finds help brighten up your own tables both inside and out! — Marie out of Food Nouveau


Melamine Bowls With Plastic Lid, Neon Mix – EUR 46.30

Every kitchen needs a colorful set of mixing bowls. This durable melamine set comes with convenient covers so you can mix and store in just 1 bowl. Perfect for potlucks!


Latticework Tea Towel from Avril Loreti

Avril Loreti is among my preferred textile designers, and I think this new Latticework tea towel is absolutely stunning. It is so gorgeous that I would probably hang it on a wall rather than using it to wash dishes.


Wood Brush – EUR 3

Washing the dishes can be a chore when you use fun tools like colorful gloves or those glowing wooden brushes.


Wooden Salad Bowl Set by Willow & Wind Home of 5, Neon Pink – $169

A fantastic gift for new, youthful and stylish homeowners, this neon-dipped wooden salad bowl set is anything but dull. Not merely are the bowls good to check at, but they’re clever too: The colored part is made of soft, rubbery plastic that is non-slip and durable.


Chelsea Bent Tray With Handles – $37

This contemporary and sleek tray consists of 100 percent recycled wood and features comfortable handles to make carrying food or drinks easy. It will add a healthy splash of color anywhere you take it.


Wooden Cake Forks – $11

These disposable wooden celebration forks are so adorable. I feel like I’d want to wash and reuse them again and again.


Ripe Kumquat Pitcher – $268

This striking handblown glass pitcher is sprinkled with a rain of bright, citrusy granules that gives it texture and color.


Melamine Salad Spoon, STAR Colors – EUR 4.80

These colorful spoons would be spectacular for serving cocktail snacks on a hot summer evening.


Oven Gloves, Gray Jouy – $34.70

These oven gloves are made with a chic Parisian brand that enjoys to introduce fashion from the kitchen. I believe the juxtaposition of this Toile de Jouy layout along with the neon pink iconic chick is absolutely irresistible.


Watercolor Flora Tea Towel – $28

Inspired by the patterns found in an original painting, this neon representation of inky blooms would be right at home in any contemporary or modern kitchen.


Triangular Mug Set – $30.99

I am an avid mug collector, and such cups adorned with a multicolor triangular routine have just caught my attention.


Pink and 24-Karat Gold Shot Glass – GBP 17.95

Can a more glamorous shot glass exist? These stunning neon pink and gold eyeglasses will perfectly grace the most trendy tables — and also be good conversation starters!


Rice dk Colored Silicone Spatulas – $17

I am in love with those glowing silicone spatulas in various shapes and sizes. I want to collect all of them.

Pigeon Toe

Scribble Tumbler – $36

These tasteful ceramic tumblers can be personalized: You opt for the color of the inside glaze from 16 lovely and vivid colors.


Il Sacchino F Essent-ial Sack – $25.18

Neon paint dripping all over your lunch bag? I believe that this is a superb pattern idea. The machine-washable newspaper and cellulose bags are extremely versatile and can be employed to save bread, wrap presents, etc..


Darling Clementine Owl Tray – $26.50

This tray features an illustration by a duo of Norwegian designers. I love the unexpected mixture of neutral black and charcoal grey with red and fuchsia, which include just the correct pop of color.

Lisa Stickley

Pinny, Pink Marigold Apron – GBP 15

This apron is female with just the ideal dose of polka dots and blue pink.


Rice dk Melamine Cup – $7.50

These joyful melamine tumblers are fantastic for children, but fun for adults too! They’re the perfect addition to a summery place setting.


Marimekko Noitarumpu Bowl – $17

It is no secret that Marimekko excels in creating colorful patterns. This bold purple, red and fuchsia pattern has been inspired by an old Russian folk tale.


Trio of Wooden Breakfast Trays – $92.96

This trio of laminated wooden trays features abstract prints that pack a punch. Made in Sweden from sustainable birch wood, they’re perfect for carrying your breakfast or utilizing as unusual serving dishes.

Next: Patios Look on the (Truly) Intelligent Side With Neon

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