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Full Circle Housing LLC

Monday, June 11, 2018

Mortgage Refinance

Anyone who’s in the mortgage business knows that the halcyon days of an easy refi boom driven by historically low rates is probably over, which means that credit score will be more important than ever in getting a borrower approved for the right loan product. But even if you pull their credit and they fall short by 5, 10, or even 25 points to qualify for the desired loan, there are still ways to salvage the file by giving their credit score a quick boost.

Score factors:

When looking at a borrower’s credit report, look past the numbers alone and focus on score factors. You’ll find them from all three credit agencies on the tri-merge credit report, and the great part is that they’re listed in descending order in regards to the negative impact on a borrower’s score, allowing you to prioritize what needs help the most.

The most common score factors you’ll see include payment history, ratio of balance to credit limits, level of delinquency, time since delinquency, and lack of recent revolving account information.

Let’s address three of the most prevalent score factors that weight on a borrower’s FICO, with specific tactics how to remedy them for the most efficient score increase.

Payment history

Your record of paying everything on time accounts for about 35% of your credit score. Even with just one late payment showing up, your score can drop anywhere from 80-100 points typically. So removing a late payment from your credit history will increase your score accordingly, but it takes more than just paying it off to erase the late payment or collection from your report completely.

Strategy #1 Pay for deletion

If you’ve missed enough payments to have an account in collections, they’ll often agree to erase any negative credit reporting for that account if you pay it off in full. Only pay the collection via a mailed certified check, with “Cash only if you will delete account from credit report” written above the endorsement line. You’ll probably have to make a lump sum payment, but then make sure you get their promise in writing via a letter of deletion. You can use that letter for a rapid rescore instead of waiting 30 days, a tool that is available to most mortgage lenders.

Strategy #2 Goodwill late-payment removal

Creditors have the power to remove a late payment from your credit report. They may do just that if you can make a good case that it was a one-time incident because you didn’t receive the bill on time, an address, change, etc. and that you otherwise have a perfect record with them.

Department store credit accounts and other retail accounts are usually pretty liberal with goodwill late-payment removals. Once the payment is removed, get a payment history update letter from the creditor, and utilize a rapid rescore or just wait 30 days for the credit score to increase naturally.

Strategy #3 Removing authorized-user accounts

Check closely to see if your borrower is an authorized user on someone else’s credit account. If that credit line has a late payment or other negative item reporting, then it’s dragging the wrong person’s credit score down. But the good news is that it’s easy for the borrower to remove themselves from the credit account. They usually only need to call the credit card company or bank and request that they are taken off the card, as well as the account deleted from their credit report, removing the negative reporting item and bolstering their score.

Strategy #4: Removing federal liens

Federal liens remain on consumer credit reports even after the lie is paid off and released, which keeps dropping the score. But if their federal lien comes from the Internal Revenue Service (IRS), your borrower is in luck. The IRS has a program that allows them to withdrawal the lien and remove it completely from the consumer’s credit report if it’s paid.

Even better, the IRS will now remove their lien from your credit report even if you still owe a balance under $25,000, as long as the taxpayer is making monthly payments as promised.

For any federal lien removal with the IRS, just call them to get the form.

Click on link below for funding or just a quote for your next Refinance...

Tuesday, May 22, 2018

What are Your Chances of Getting Approved for a Mortgage?

Lenders use three criteria to decide whether or not to approve a mortgage application. Borrowers must meet minimum standards for credit scores, loan-to-value ratios (LTVs) and debt-to-income ratios (DTIs) in order to be approved. Minimum standards vary by the type of mortgage in which you are applying for and by the lender.
Over the past three years, mortgage lenders have been slowly loosening their standards for mortgages. Understanding the reasons for this trend and the differences among different loan types will help today’s borrowers understand their options.
Saving for mortgage

Credit scores, LTVs, and DTIs

The most widely discussed lending standards are FICO scores, the credit scores created by Fair Isaac Corporation. FICO scores are based on information from consumer credit reports maintained by the three leading credit reporting bureaus, TransUnion, Experian, and Equifax. All three bureaus grade your credit history on a range from 350-850. Your score will be different from each credit bureau because not all creditors report to all three companies.
Debt-to-income ratios measure the cost of servicing a borrower’s debt on a monthly basis compared to the borrower’s pre-tax monthly income. A DTI of 30 percent means that the borrower is paying 30 percent of his gross monthly income to pay the monthly cost of existing debt. DTI is expressed two ways. “Front-end” DTI represents the ratio of debt to income at the time the borrower applies. “Back-end” DTI is the ratio after the monthly cost of the mortgage is added to existing debt.
Loan-to-value ratios measure the borrower’s exposure in each transaction. A loan-to-value ratio of 90 percent means the borrower is putting 10 percent down and the lender is responsible for the remaining balance. The higher the LTV, the greater the exposure for the lender.
Credit report

Trends in mortgage approvals

Following the housing crash of 2008, lenders immediately raised their lending standards to stabilize housing markets and restore faith in the nation’s system of housing finance. Tougher standards were a reaction to the lax standards and enforcement that prevailed during the boom years that preceded the crash and over the past decade, they have loosened slowly.
Since 2015, average FICO scores for all mortgages have fallen from an average of 731 to 721. Averages of FHA purchase mortgages (loans to buy rather than refinance a home) are down about 10 points to an average of 677. At an average of 751, conventional purchase mortgages are virtually unchanged.
Any borrower who is concerned with getting approved should consider an FHA loan. FHA is best known among first-time buyers for its 3.5 percent down payment, but its FICO scores are 70 points lower than conventional mortgages. If your FICO is lower than 580 but higher than 500, you can still get an FHA loan, but you have to put down 10 percent. One of FHA’s drawbacks is its requirement that borrowers take out FHA mortgage insurance. Unlike private mortgage insurance, FHA insurance cannot be canceled when the owner has achieved 80 percent equity. It continues until the house is sold or the owner refinances.
Conventional lenders underwrite FHA loans, which are backed by a 90 percent government guarantee, reducing the risk for lenders substantially. FHA loans also can handle borrowers with higher levels of debt. Average DTIs for FHA purchase loans in March 2018 were 29/44 (29 percent front-end and 44 percent back-end) compared to 24/46 for conventional purchase mortgages.
Click on link below for funding or your next mortgage inquiry.

Saturday, May 12, 2018

Full Circle Housing LLC

Location:  Developments with alot of    demand/sales activity in various cities

     Goals:  Our tactical plan is to acquire/erect 10 SFHs in the 1st year at least 30% below FMV.  However, we plan to aggressively purchase foreclosed homes & Multi-family properties during the 1st & 2nd year and at the same time gaining vast experience and helpful contacts and with social media utilization on various Real Estate Platforms/Communities, we will have a plethora of Acquisition targets and Exit strategies for Liquidity. We plan to satisfy our debt in a timely manner.  Our objectives are to create & fulfill demand while providing affordable living and to become a dominant leader in the area of investment or very quick ROI on Construction builds. Our strategic plans are to do some type of offering(exempt offering, private placement, blind pool, online crowdfunding...)to satisfy our long-term debt with the banks/financiers, thus converting the company's debt into equity. Or, by acquiring property at least 30% below FMV, we're locking in equity that'll be capitalized later on through alternative procedures. Some Exit strategies are 1)Refinance 2)1031 Like kind exchange 3)Outright Sale 4)LOC 5)Seller-Financed with 20% and sell Note in Secondary market. From the proceeds we plan to diversify our investments with 1)tax liens 2)purchasing discounted notes 3)short sales 4)develop subdivisions and mobile home parks....We also plan to acquire a majority interest or form a strategic alliance with a leading mortgage or assemble a team of talented loan officers/mortgage brokers to provide financing to our prospective buyers of homes and a healthy construction firm. These strategic moves compliment each other, thus adding synergy which in turn weigh the "economies of scale" in our favor. After Year 2, we plan to refinance our whole portfolio of +/-20 SFHs we acquired for +/-1,400,000...but is valued/appraised at +/-2,000,000...NOTE: OUR EQUITY IS $600,000 PLUS POSITIVE FREE CASHFLOW FROM RENTAL INCOME. WE PLAN TO LEVERAGE/COLLATERALIZE OUR INSTANT EQUITY OF $600,000 AT 80% AND WE WILL HAVE AT LEAST $480,000 TO DEPLOY IN MORE INCOME PRODUCING ASSETS.
Click on link below for more of this Real Estate related Business Plan....

Mortgage Refinance

Anyone who’s in the mortgage business knows that the halcyon days of an easy refi boom driven by historically low rates is probably over, wh...