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Applying for a Mortgage after a Bankruptcy

By understanding the requirements to get a mortgage after a bankruptcy and by carefully rebuilding your credit standing, you can apply for a loan and buy a home.

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What Are Typical Mortgage Down Payments?

Traditional mortgage down payments have always been 10 to 25 percent of the total purchase price of the property. more

How to Get Approved for an FHA Loan despite Bad Credit

FHA (Federal Housing Administration) loans are very flexible, and you may qualify for an FHA loan with bad credit. more

Appraisal Basics

A real estate appraisal is an evaluation that determines the value of a property. There can be many different reasons for having an appraisal conducted, but one of the most common purposes is to determine the market value of a house before a mortgage transaction. more

Fixed Rate Mortgages

These mortgage loans have fixed interest rates for the duration of the loan. Fixed rate mortgages do not change and they are not tied to an index, unlike adjustable rate mortgages. The interest rate is fixed in advance at a specific interest rate.

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Financial Firms Offer CashOut Loans Without Debt

In a new type of home equity loan, two California-based financial companies are allowing homeowners to cash out their home’s equity without the burden of debt or interest fee of traditional loans. EquityKey  and FirstREX  both offer these types of mortgage loans in exchange for a portion of the future equity of the home. The way it works is that when a homeowner wants a loan, they receive a large lump sum of money to be used any way they want. In return the homeowner sell a percentage of their home’s future appreciation value. For example, you might take out about $50,000 in equity and agree to turn over 50 percent of your equity appreciation when you sell your home. If you sell in 15 years and the home has gained $200,000, you have to give the lender $100,000 at the close of the sale. “We refer to it as a real estate participation agreement, because the key difference between debt and equity is while we will participate in the upside, we have no absolute right of getting paid back the initial principle investment,” said Jeff Nash, co-founder of EquityKey in a Forbes interview. “If initial prices go lower, we reduce the amount we are owed, until we owe nothing.” This type of equity loan can also be used as a down payment for some buyers. They sell a portion of future equity to one of these financial firms and they receive a chunk of money to contribute to a down payment on a mortgage with a different lender. There may be some cases where the borrower would owe money out-of-pocket to the equity loan lender. If they sell within a few years of the agreement when there has been little or no appreciation, the borrower may be required to repay some of the cash. The EquityKey and FirstREX models can be a good fit for those who plan to stay a long time in their homes but do not expect the market to appreciate substantially. It can also be good for first-time buyers looking for down payment help. “Their prospects in the future may be wonderful, but their cold cash on the spot is not wonderful,” said David Blitzer of S&P Dow Jones Indices. “So if you can do things like let them monetize in advance some of the future value of the house, that’s big plus.” more

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