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Important Facts and Details About Best Maryland Mortgage

October 19, 2018 By Tyler Plack Leave a Comment

The process of using other property in the shape of security to acquire a loan is known as a mortgage. There are various options available to you for best Maryland mortgage. Usually, mortgages are applicable to assets pertaining to real estate. In the state of Maryland in the U.S, usually, there are two parties involved in a mortgage transaction. One being the creditor, who offers the loan and the other party, is the debtor, who receives the loan. There are other third parties who can be involved like a mortgage broker, a legal advisor, and others. Buying real estate properties for future investment is another reason people opt for mortgages.

How to Repay Mortgages in Maryland?

There are various ways to repay mortgages in Maryland, like any other conventional loan.

  • Interest and Capital
  • Interest Only
  • No interest or Capital
  • Interest
  • Partial Capital, etc

Types Best Maryland Mortgage

There are different types of loans which are available in Maryland, here are some of them

  • Second Mortgages
  • Refinance Mortgages
  • Bad-credit mortgages loan

The Process of Ascertaining the Mortgage Value

In Maryland, the borrower acquires a mortgage which is based on various factors like

  • Value of the property
  • The loan amount required
  • The Income, and
  • The current rate of interest

Ideally, the income of the borrower should be sufficient enough to cover the principal amount and the interest as well on a monthly basis.

Rates of Mortgage at Maryland

In Maryland, the rate of mortgage can either be variable or fixed. Here is a list of different options which are available

  • 30-year fixed
  • 15-year fixed
  • 1 year ARM
  • 3/1 ARM
  • 5/1 ARM
  • 5-year balloon
  • 7-year balloon
  • 3-year fixed Jumbo
  • 15-year fixed Jumbo, or
  • 1-year ARM Jumbo

In Maryland, for some to be eligible for a loan, the credit report of the borrower is being thoroughly analyzed by the lending company. The creditworthiness of the individual is being determined from the credit report. His earlier payment records, whether there are any past bankruptcies and the level of income is also being ascertained.

Therefore, in order to become eligible to acquire a loan, it is important that one has an impressive credit report while applying for a mortgage. This would help him get a favorable rate. However, there are various financial institutes and companies in Maryland who offer loans and mortgages to individuals with bad credit record and no record of credit whatsoever.

The Process of Home Mortgage in Maryland

The process of a home mortgage in Maryland begins when the applicant submits an application and the necessary documentation pertaining to his income, credit history, and other relevant information. Then the lending company arranges for thorough inspection of the different documents that have been submitted by the applicant along with the credentials issued by the underwriter and granting of the loan. Some fees are being charged by the creditors in the form of entry fees, exit fees, lender’s mortgage insurance, and administration fees.

There are multiple companies in Maryland who lends money. Most of these institutions have their own websites and can be contacted online. There are also provisions for the applicants to compare the mortgage rates, request for quotes online and calculate the payment options. Some of them use highly advanced calculators which would calculate the tax advantages and monthly payments. Online financial advisors are also available who offer valuable information on Maryland Mortgage.

Mortgage Rates in Maryland

There are different choices offered by the best Maryland mortgage companies to their customers. One of the major differences in these different types of mortgages is their rate of interest. Basically, there are two different types of mortgages available, they are:

Fixed Mortgages: In the case of fixed rate mortgages, the rate of interest is fixed

Adjustable Rate Mortgages: As far as adjustable rate mortgages are concerned, the rate of interest is adjustable and keeps on fluctuating according to the condition of the market. The rate of ARM vary, depending on the security Treasury Security Rate, CD or Certificate of Deposit Rate or the COFI, which is also known as the Federal Home Loan Bank’s 11th District Cost of Funds Index.

Someone can apply for a fixed rate if the currently available rate of interest is low. As far as adjustable rate mortgages are concerned, they are ideal if the rate of interest is expected to decline within a span of few years. If the rate of interest is likely to come down, in that case, one has the option to refinance the current FRM and transfer it to an ARM. There are also mortgages available which have a “rate-lock period”.

Factors Determining the Interest Rates

The rates of mortgage interest are being determined by the dynamics of the investment and bond markets. The mortgages are scrutinized and bundled up into bonds which are known as mortgage bonds or mortgage-backed securities. These bonds are being traded like stocks in the markets. The interest rates of the mortgages are being determined by the movements of the price of these bonds. Usually, the interest rates of the mortgages are being determined by the conditions prevailing in the international market.

When someone is looking up the mortgage rates, the Annual Percentage Rare or the APR along with the current rate is also given. The actual cost of the loan is being reflected by the APR, which includes upfront costs and fees. APR is used to compare different types of loans.

The Mortgage rates of Maryland are at par with the prices of other states. The prices of the 1year ARM, 15-year fixed, 30-year fixed are 5.01%, 5.80%, and 6.30% respectively. On the other hand, the 10/1, 7/1, 5/1 and 3/1 have rates of 6.18%, 6.07%, 5.90%, and 5.82% respectively. These rates vary from one financial institution to another.

When it comes to best Maryland mortgage, there are multiple different options available. The rate of interest is the most important thing that needs to be looked into.

Mortgage Lenders in Maryland

There are numerous companies operating in Maryland who lends mortgage. Many of them offer different types of mortgage loans at a competitive rate in order to attract a market which is already booming. When it comes to looking for a lending company, it is very important to look for one which has a fair amount of reputation in the market. The company should be offering the best policy at the best available price. Basically, there are different brokerage companies which play the role of an agent and acts between the lenders and the borrowers. It is the job of the brokerage companies to assist their customers in seeking out and comparing the best offers floated by different companies. This is a very crucial task and can be very difficult for an individual to carry out without professional help.

These brokerage companies work in association with numerous lending companies and therefore, they can help all different types of borrowers, even those whose credit scores are pretty bad.

Aspects to Consider

There are certain important aspects that need to be taken into consideration while taking a mortgage. They are:

What is the interest rate that has been offered?
What the monthly payment would be?
What is the type of loan? ( fixed or variable)
Given the present market condition, is it ideal to go for the loan?
What are the different types of fees?
Is there any type of hidden costs?

In Maryland, most of the companies have similar types of offers. However, there are some companies who offer slightly better rates, which depend on the credit rating of the applicant. There are also companies available in Maryland who provides mortgage loans that are customized for those who have poor credit records, for the first time home buyers, and for those who are self-employed. These companies also play an important role when it comes to second mortgages, debt consolidation, and mortgage financing.

How to find a Mortgage Company in Maryland?

In Maryland, there are multiple different options available when it comes to mortgage companies. For those who are looking for one, for them the best option would be to look on the internet, there is tons of information available along with all the relevant details. Besides, newspapers, yellow pages, and personal contacts can also come in handy in the search for a credible mortgage company in Maryland.

Before approaching any company, it is always advisable to browse through their website. Most of these companies have their own website where one can find all the relevant details. Some of them have easy and simple mortgage calculators that can be very helpful in order to determine the tax savings, monthly payment, and many other vital aspects. The rating of the company and its financial status also needs to be checked. Some other important sources for finding a credible company are online mortgage quote services companies and consumer guides.

Mortgage Points and Tips to Negotiate

The fee which is being paid to the lenders to handle mortgage is known as mortgage points. These are usually paid in cash and can influence the final rate of interest of the mortgage by a great extent. There are multiple different benefits one can get by purchasing mortgage points. The rate of interest can be lowered, which would help to save a considerable amount of money in the days to come.

In Maryland, the mortgage point prices are usually variable. However, it remains at the range of 1% of the total loan amount. Both the buyer and the lender can benefit from it. The lenders receive liquid cash automatically and as far as the buyers are concerned, in the long run, they may. This would help them to save thousands of dollars.

The ratio of interest rates to point is not fixed. Therefore, it is very important to carry out an extensive market research in order to make sure that the rates offered by the lender are competitive. Usually, the rates are given in terms of percentage Negotiation comes into the picture while discussing how purchasing these items would drastically lower the rate of interest.

It is important to ensure that the percentage rates are being viewed in terms of dollars. For an average person, it can be difficult to understand as to how much they will be able to afford by the percentage figure.

Right Mortgage Terms

Mortgage loan calculators are being used by many people for buying a new home. These calculators can be easily found over the internet and are free of any charges. These calculators have proven to be very helpful when it comes to getting a rough idea on the monthly payments and for the rest of the season. These calculators can also be found on online property listings and they offer a simple comparison. However, in order to use these tools, it is important to have a clear understanding of the various types of mortgage terms and which one would fit perfectly into one’s requirement.

For the home buyers, fixed rate mortgage terms are chosen commonly, this is particularly true if they are looking forward to staying in the house for a long period of time. The term “fixed rate” emphasizes the fact that the rate of interest of the loan will remain uniform for the entire duration. So, no matter whether it is a 30 or 60 years loan, the rate will remain unchanged.

In Maryland, there are multiple different options available when it comes to availing mortgage. However, one needs to be very careful and cautious before finalizing the deal with any particular company. The rate of interest is perhaps the most important aspect that needs to be taken into consideration. Besides, other factors like the reputation of the company and its credibility should also be given equal importance. If someone is looking for best Maryland mortgage, the best option for him is to browse through the internet; there are tons of information available.

Maryland FHA Loan Requirements, 2018 Limits, and Guidelines

August 29, 2018 By mandakini 2 Comments

Maryland FHA Loan Requirements, 2018 Limits, and Guidelines

Maryland FHA Loan Requirements

All you need to know about Maryland FHA Loans


Getting a home loan is can be easy if you are a first-time home buyer or a seasoned one. The FHA mortgage loan is something that eliminates many of the problems associated with conventional loans. Here are some reasons why buyers in Maryland prefer an FHA mortgage loan rather than the traditional ones:

  • Easy, streamlined refinancing opportunities
  • Highly lenient credit requirements (500+ credit score)
  • Low down payment promises (3.5% down payment)

These are just a few of the reasons that make FHA home loans a much better option.

But before we dive into all its benefits and compromises, let’s discuss what exactly FHA loans are:

What is an FHA loan?

An FHA loan is a type of government-backed mortgage that is insured by the Federal Housing Administration (FHA), one of the branches of the department of housing and urban development.

The FHA is a go-in-between between the lender and the borrower. They not only back your loan but also offer attractive insurance to the lender in case you are unable to repay the loaned amount. Thus, the lender is ensured that he will not suffer any losses and offers more loans at lesser risks. 

Moreover, the FHA loan requirements are less strict so that more people can avail the money and work on their dream of having a house of their own.

What are the FHA loan requirements?

The most basic FHA loan requirement in Maryland is your intention to be a homeowner. If you are interested in rentals and want a second home, typically you will not qualify for the loan. Apart from that, here are some requirements that you will need to fulfill.

 Learn more and get pre-approved today!“

Credit Score

The credit score for your FHA loan requirements depends on the down payment option you want to avail. You need a minimum credit score of 580 for an FHA loan with a down payment of 3.5%. If your credit score is below 580 but above 500, you’ll need to put down at least 10%.

While FHA loans do not require a stellar credit score, any score below 500 will be unacceptable. There are exceptions, however, for applicants with “non-traditional credit history or insufficient credit.” Even if you feel that you may not qualify on the basis of credit, remember that our experts have access to nonprofit credit repair programs.

If you have any history of bankruptcy, you need to be out of it for at least two years and without any foreclosure for past three years. You also need to be current with payments for any federal student loans you might have as well as with your income taxes.

FHA Approved Lender  

As FHA itself is not a lender and just an entity backing your loan, you will get your home loan only from an FHA-approved lender. These are lenders who are able to provide loans that are backed by the FHA.

FHA Approved Lender

As the services, cost, and standards vary among the lenders, and it is advised to shop around before settling on the best one. You can obtain FHA home loans through various sources including banks, credit unions, community banks, independent mortgage lenders, and more. Generally speaking, your best option will be to speak with a mortgage broker, as they have access to the widest variety of different lenders and can do the shopping and comparison for you.

 

Minimum down payment

The FHA loan requirements include a minimum down payment of 3.5% of the total cost for most mortgage borrowers. Anything below the required percentage will not be sufficient. The good news is that the borrowers can use anything from their savings, government grants, to financial gifts from friends or family.

 

Mortgage insurance

If a borrower put down anything less than 20% of the total cost as down payment, then mortgage insurance will be charged. The FHA loan requirements include two mortgage insurance premium one needs to pay, an upfront premium and an annual premium.

The upfront premium is 1.75% of the total loan amount and needs to be paid when the borrower initially gets the loan. The yearly premium is anywhere from 0.45 % to 1.05 %, depending on the loan amount, term, loan-to-value ratio. This premium is equally divided into 12 installments and needs to be paid on a monthly basis.

 

Steady employment history

The applicant/borrower needs to have a stable and reliable employment history to be approved according to the FHA loan requirements. You need to have at least two years of employment history.

If your employment history shows constant fluctuations between employers and less time with each one, you will be deemed unreliable and will not meet the criteria required.

 

Income requirement

Apart from the evidence of two years of continuous employment with the same employer, your FHA loan requirements also call for a steady income. Moreover, your income history must show signs of improvement along with being stable and steady.

The general debt-to-income ratio that FHA allows is up to 43%. There are some exceptions where loans have been approved at 50%.

 

What are the advantages of getting FHA home loans?

FHA home loans are quite popular, and it is because of the plethora of advantages they have as compared to the traditional home loans. FHA loan requirements are quite lenient and do not call for strict action on numerous points. For example, you do not need a spectacular credit score to get approved. Other advantages include a lower amount of down payment, lack of private mortgage insurance, and much more.

Another unique advantage that FHA home loans offer is the coverage of the borrower’s closing cost. FHA allows lenders, builders, and home sellers to contribute to the closing cost which can act as an added incentive for people to buy new homes. They can pay for the appraisal, title fees, credit report, and such.

Although, most lenders will typically charge an elevated interest on the loan for the amount they will pay as the closing costs. The borrowers get a choice; they can estimate the amounts and choose whether they want the closing cost or the elevated interest rate.

Apart from the advantageous FHA loan requirements, you can also borrow cash for home repair and maintenance. FHA offers individual loans for people who cannot afford the money needed to repair their homes and make it habitable.

The best thing about this loan is that the loan amount is not dependent on the current appraised value of your home but instead on the projected value after you have repaired and revamped the house.

Such repair cost covers things like flooring, plumbing, bathroom remodeling, decks & patios, heating system, kitchen remodeling, and air conditioning.

People suffering from financial difficulties often see the greatest benefit from FHA home loans. It gives you a chance to reset and get approved for a loan even with a history of foreclosure or bankruptcy. While most banking institutions do not approve applicants with checkered financial history, FHA gives you a chance.

 

How the loan limits set?

The FHA loan limits are adjusted annually based on a variety of factors. The maximum loan limit and the minimum loan limit are typically adjusted according to the changing market and home prices. So, the limit for the FHA home loans varies from place to place, and the cost of living in that particular area will affect your overall loan application.

The areas with a higher cost of living will have more upper limits while the area with lower cost of living will have a lower limit. There are exceptions for places where the overall construction is more expensive including states like Hawaii, Alaska, the Virgin Islands, and more.

As a matter of fact, you will be amazed to know that low-cost areas will offer a loan limit of $294,515 for a single family home, $377,075 for a duplex, $455,800 for tri-plex, and $566,425 for a four-plex. Other cities offer similar loan limits with some variations!

In high-cost areas like New York City will offer a loan limit of $679,650 for a single family home, $377,075 for a duplex, $455,800 for tri-plex, and $566,425 for a four-plex. Other cities offer similar loan limits with some variations!

 

What are the required documents?

Once you have met all the FHA loan requirements for your home loan in Maryland, the application process starts. Here are all the documents you will need for your application process.

  • Social security card
  • Evidence of residence for the last two years
  • Gross monthly income from your current employer
  • Employment history for the past two years
  • Details on all active loans
  • Bank account information
  • Details on any other owned real estate
  • Approx. value of personal property
  • Current paycheck stubs
  • Individual tax returns for the past two years
  • W-2 forms of the past two years

Once you have fulfilled all your FHA loan requirements and gathered all the required documents for the application process, you can go forward with your loan application. It is advised to shop around and look at different sources as the loan benefits and interest rates might vary.

 

“ Getting pre-approved takes just a few minutes. It’s completely free and there’s no obligation. Click & fill out the form and a licensed loan officer will reach out to you shortly:“

Conclusion

As you can see, the FHA mortgage loan has been created specifically to simplify the process and make it easy for people to own their dream home. However, before you proceed further with it you must understand the basics.

People generally forget about understanding the process and end up making mistakes with the process. This is the reason they end up facing a lot of trouble not just during the filing process but also at later stages of the loan as well.

If you are keen on taking the same, it is advisable to either understand the process fully or get in touch with an expert who can do it for you. And, only then proceed further with the loan application.

Loans for Investment Properties

August 26, 2018 By Tyler Plack Leave a Comment

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