No Cost Mortgage

No Cost Mortgage

• A no cost (or “no point, no fee”) mortgage is the most common way to refinance in today’s market.
• Here’s how it works. Every refinance transaction has real costs associated with it. These costs include title, escrow, credit report, notary, appraisal, etc. The question is: Who pays for these costs? The real answer is that the borrower always pays these costs, either directly at closing or through a slightly higher interest rate on their loan.
• Let’s see an example:$300,000 Loan Amount
  = All fees add up to $3,000
  Rates for that day:
  4.250% (1.00) credit
  4.125% (.500) credit
  4.000% 0.00 <—”par” rate
  3.875% 1.00 Discount points
  If the borrower chose the 4.000 par rate, then they would have to pay the $3,000 in closing fees. If they chose the 3.875 discounted rate, they would pay the $3,000 plus 1.00% of the loan amount in exchange for the below-market rate. If they didn’t want to pay points OR fees, then they would choose the 4.250% rate, which would give them a 1.000% credit of $3,000 to offset the $3,000 in fees.
  
  More about me here:  www.MyMortgageGuyTOM.com

No Cost Mortgage

Credit Report Error Sinks Short-Sellers Bids for a Mortgage

Credit Report Error Sinks Short-Sellers Bids for a Mortgage

For a short sale, a borrower is eligible for conventional loan financing 24 months post-short sale at 80 percent loan-to-value or lower. But for a foreclosure, a three-year window is required to get a mortgage again with as little as 3.5 percent down on a primary home with an FHA loan. Seven years must have passed for the homebuyer to qualify for a conventional loan post-foreclosure (or, four years with extenuating one-time economic hardship circumstances). So the addition of chapter 5, 8 or 9 flags the previous short sale on the credit report as a foreclosure, thereby making the loan ineligible for conventional financing in a shorter time frame. 

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Source: AOL Real Estate

Credit Report Error Sinks Short-Sellers Bids for a Mortgage