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Carlisle Mitchell

Insider Tips for Real Estate Investors

By Carlisle Mitchell | Real Estate Pro in Houston, TX
  • Jumbo Loans

    Posted Under: Home Buying in Houston, Financing in Houston, Investment Properties in Houston  |  August 3, 2014 10:36 AM  |  178 views  |  No comments
    Jumbo loans also referred to as "Jumbo Mortgage"is a mortgage with a loan amount exceeding the conforming loan limits set by the Office of Federal Housing Enterprise Oversight (OFHEO), and therefore, not eligible to be purchased, guaranteed or securitized by Fannie Mae or Freddie Mac. OFHEO sets the conforming loan limit size on an annual basis.
    Jumbo loans are often securitized by institutions other than Fannie Mae or Freddie Mac. These securities carry more credit risk than those issued by Fannie Mae or Freddie Mac, and therefore, trade at a yield premium which translates into slightly higher interest rates. However, in recent years the spread in interest rates between jumbo and conventional mortgages has been reduced. 
  • Conforming Loan Limit

    Posted Under: Home Buying in Houston, Financing in Houston, Investment Properties in Houston  |  August 3, 2014 10:18 AM  |  104 views  |  No comments
    The conforming loan limit is the limit on the size of a mortgage which Fannie Mae and Freddie Mac will purchase and/or guarantee. The conforming loan limit is set annually by Fannie Mae's and Freddie Mac's federal regulator, The Office of Federal Housing Enterprise Oversight (OFHEO). OFHEO uses the October to October percentage increase/decrease in the average house price in the monthly interest rate survey of the Federal Housing Finance Board (FHFB) to adjust the conforming loan limits for the subsequent year. 

    Mortgages which exceed the conforming loan limit are known as jumbo mortgages. The interest rate on jumbo mortgages can be higher than the interest rate on conforming mortgages. A borrower whose mortgage amount slightly exceeds the conforming loan limit should analyze the economics of reducing their loan size through a larger downpayment or possibly using secondary financing to qualify for a conforming mortgage verses a jumbo mortgage. 
  • Conforming Loans

    Posted Under: Home Buying in Houston, Financing in Houston, Investment Properties in Houston  |  August 3, 2014 10:11 AM  |  117 views  |  No comments
    A confirming loan is mortgage that is equal to or less than the dollar amount established by the conforming loan limit set by Fannie Mae and Freddie Mac's Federal regulator, The Office of Federal Housing Enterprise Oversight (OFHEO) and meets the funding criteria of Freddie Mac and Fannie Mae. 

    The term "conforming" is most often used when speaking specifically about a mortgage amount; however, the terms "conforming" and "conventional" are frequently used interchangeably. Mortgages that exceed the conforming loan limit are classified as non-conforming or jumbo mortgages.

    OFHEO, which sets the conforming loan limit on an annual basis, has regulatory oversight to ensure that Fannie Mae and Freddie Mac fulfill their charters and missions of promoting homeownership for lower income and middle class Americans. 
  • Know Your Credit

    Posted Under: Home Buying in Houston, Financing in Houston, Credit Score in Houston  |  July 28, 2014 8:27 AM  |  151 views  |  No comments
    Know Your Credit: Lenders continue to lower their credit benchmarks as the economy rebounds. The average credit score for all closed loans last month was 728, compared to 746 in June 2012, according to mortgage software firm Ellie Mae. That two-year drop has been more pronounced with FHA loans than conventional financing.

    FHA loans tend to have the most lenient credit standards. Here's a brief snapshot of the average FICO scores last month for the three major loan types:

    Conventional: 755
    VA: 708
    FHA: 683

    Keep in mind two key facts. One is that these are averages. Two is that lenders set their own credit score requirements, which can vary depending on the company, your financial background and more. It's ideal to check your credit well in advance of applying for a loan -- six months, or even longer -- to work toward improving your credit score. (You can pull your credit reports for free once a year to check for problems that are lowering your score, and you can use a free service -- like CreditKarma.com - to monitor your credit score for progress.)

    Improving your credit score can help you get a lower interest rate and boost your chances of loan approval. However, a score that's just above subprime (typically at least a 620) could still get you into a home loan. Some FHA lenders may even go as low as a 580 score. That's a big reason why it's so important to understand your lending options.

    Filed Under: Carlisle Mitchell, Carlisle Mitchell Insider Tips for Real Estate Investors, Market Analysis, Houston
  • Using Secured Credit Cards To Build Credit

    Posted Under: Financing in Houston, How To... in Houston, Credit Score in Houston  |  July 18, 2014 2:25 PM  |  220 views  |  1 comment
    Secured credit cards can build your credit
    Building up your credit has become even more important over the past few years as credit is harder to come by. Secured credit cards can help people with little credit history build credit and even save some from bad credit.

    When lenders look at a credit report, one of the things they want to see is that you have a history of repaying loans in a timely manner. If you've never taken out a loan before or have only been using credit for a short time, lenders often lack the information they need to decide how creditworthy you are. In cases like this, a secured credit card might be your only option.

    In the same way, if you had a rough period where your bills went unpaid or were only paid sporadically, it can be difficult to convince lenders that you are going to pay off any new loans. If you do manage to get a loan or credit card while having these black marks on your credit report, you will likely have to pay high fees and high interest rates.

    Rebuilding your credit
    There is a way to build -- or rebuild -- your credit. A secured credit card works like a debit card. Once you are approved, you make a deposit into an account linked to this new credit card. The card you receive will have a Visa or MasterCard logo on it, but you will not be able to charge more than the amount you previously deposited onto the card.

    Over time, as you continue to make payments and stay within your credit limit, you are building credit history and improving your credit score.

    Be a careful consumer
    Some secured credit cards have fees. Also, ensure the card issuer reports your account to at least one of the three main credit bureaus so it can help improve your credit score. It is important to research the card the same way you would an unsecured card. Also, check whether your current bank or credit union might have a secured credit card to offer you.
  • What is Credit?

    Posted Under: Financing in New York, Credit Score in New York  |  July 15, 2014 3:30 AM  |  194 views  |  No comments
    Credit is borrowed money that you can use to purchase goods and services when you need them.  You get credit from a credit grantor, whom you agree to pay back the amount you spent, plus applicable finance charges, at an agreed-upon time.

    There are four types of credit:
    1. Revolving credit. With revolving credit, you are given a maximum credit limit, and you can make charges up to that limit. Each month, you carry a balance (or revolve the debt) and make a payment. Most credit cards are a form of revolving credit.

    2. Charge cards. While they often look like revolving credit cards and are used in the same way, charge accounts differ in that you must pay the total balance every month.

    3. Service credit. Your agreements with service providers are all credit arrangements. You receive electricity, cellular phone service, gym membership, etc., with the agreement that you will pay for them each month. Not all service accounts are reported in your credit history.

    4. Installment credit. With installment credit, a creditor loans you a specific amount of money, and you agree to repay the money and interest in regular installments of a fixed amount over a set period of time. Car loans and mortgages are two examples of installment credit.
  • The Difference Between Mortgage Bankers and Mortgage Brokers

    Posted Under: Home Buying in California, Financing in California, Home Ownership in California  |  July 15, 2014 3:13 AM  |  210 views  |  No comments
    A mortgage banker is a company, individual or institution that originates mortgages. Mortgage bankers use their own funds, or funds borrowed from a warehouse lender, to fund mortgages. 

    After a mortgage is originated, a mortgage banker might retain the mortgage in their portfolio, or sell the mortgage to an investor. 

    Additionally, after a mortgage is originated, a mortgage banker might service the mortgage, or sell the servicing rights to another financial institution. 

    Larger mortgage bankers service mortgages, while smaller mortgage bankers tend to sell the servicing rights.

    The distinguishing features between a mortgage banker and a mortgage broker is that mortgage bankers close mortgages in their own names, using their own funds, while mortgage brokers facilitate originations for other financial institutions and do not close mortgages in their own names. 
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