Your Questions About Mortgage Loan Process

John asks…

ABOUT REVERSE MORTGAGES?

So a reverse mortgages are like a loan process , This is what I am hearing , Right?
I was wandering cause my sister had one for about a year, after her husband passed she had to file bankrupt, and now she is 100 % owner again . It is kinda hard to beleive , I still wander , is this possible ?

John answers:

A reverse mortgage is a loan, just like any other loan. And like any other loan, it must be paid back eventually (Angelique is incorrect). One of the differences between a reverse and a traditional mortgage is that a reverse only gets paid back lump sum when the home is sold or the senior moves out permanently – unlike a traditional mortgage where you have to make monthly mortgage payments. That is why it is reserved only for seniors 62 and up.

You still own the home and can sell it at any time (Mildred F. Is incorrect). There is no prepayment penalty. And if there is any profit from the sale, after you pay off the loan, that money is yours. And the bank cannot evict you (Darren is also incorrect) even if your equity runs out and you owe more than the house is worth because it is FHA insured.

Yes, it is possible because it was designed precisely for seniors who are cash poor but house rich. It is not free money. It is meant mostly for seniors who may not qualify otherwise because they are on Social Security or SSI and cannot afford to make monthly mortgage payments, and allows them to borrow money now while they can improve the quality of their lives and pay it back in one lump sum when the pass away.

Jenny asks…

Could i get a mortgage loan?

My credit score is right around 640.
I have a car loan of 14k, payments of $270/mo.
And no other debt besides month to month expenses.
Annual income of about $28,000.
Could I get a loan and if so about how much? Not looking for a mansion obviously. Just curious before I go apply.

John answers:

Credit bureau scores and free credit scores are meaningless. Almost every mortgage lender uses your FICO Scores, which are available for about $20 each at http://www.myfico.com

Minimum FICO Score is 620
With an annual income of $28,000, you could qualify for a mortgage of about $80,000. Get a per-qualification letter before home shopping. Read “Home Buying for Dummies” to educate yourself on the process.

Ruth asks…

mortgage application process?

hi all if someone has applied fir a mortgage and it has been agreed in principal and they have passes initial credit check what’s next? They have also provided all bank statements and required Info. If broker says it looks affordable is. There a good chance a person will get it? What’s the reason for sending info off to lender. Eg pay slips

John answers:

Well, First you apply for a mortgage, you get pre-qualified to make sure you have all the items need to afford the home. Usually a loan officer or mortgage broker does this. This is like an intinal review.
The bank/lender who is loaning the money pays underwriters to review the total complete loan before they will allow the loan to go through. Once it all looks good then they will issue you a loan.
If we didn’t have underwriters making sure borrowers info is good and not fake then a lot more people would be defaulting on there loans.

Sandra asks…

Has anyone financed a home mortgage loan through eloan?

Were you happy and who was the lender? Do they manage their own mortgage paper?

John answers:

E loan is neither a mortgage bank or an investor so, no, they do not service their loans but sell that servicing to others for a profit, just like many wholesale lenders.

A successful borrower/lender transaction is determined just like anything else, the proficiency of the lender and the quality of the communication between the two parties.

As a direct mortgage lender I am, of course, somewhat suspect of reaching into a barrel when I don’t know if I’m going to come up with an apple or a snake, but it is a matter of personal choice.

I have heard of successful on line mortgage transactions and horror stories. The more informed the borrower is about the process and their options the more pro-active they can be. The more pro-active they can be the more likely they are to avoid disappointment.

Good luck.

David asks…

mortgage loan application?

I am preapproved for an FHA loan, already made offer and its been accepted. My credit score is 640, but they’ve already seen that when they preapproved me. If my credit situation stays the same from here on out, is there any way I won’t be approved for the loan?

John answers:

As long as the your income and debt information that you provided during the application process remains the same, you should be safe. Preapprovals are usually based on verbal information given by the borrower to the lender. Once you submit your income documentation (paystubs, W2s, tax returns, etc.) the lender will confirm your debt to income ratio is within tolerable limits based on program guidelines.
Most FHA loans require a 620 score minimum, so a credit score drop not withstanding, you should be good to go.

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