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Consumer News and Advice Archive


What if I am turned down for a loan?

Unless your credit is absolutely abysmal - with all kinds of judgements, liens, excessive delinquencies or non-payments, foreclosures and bankruptcies that show no attempt on your part to make progress - you can generally get a loan. ...


Do I have to disclose a parent’s gift to the lender?

Lenders prefer that you do. But relax, you are not penalized in any way for receiving parental help. An estimated one-third of all first-time buyers purchase homes with a loan or a money gift from parents. ...


What are the benefits of prepaying my mortgage?

You get to save thousands of dollars and shave years off the life of your loan because the additional payments made toward your monthly principal basically constitutes a partial prepayment of your mortgage. ...


What about state and local governments?

Just about every state now offers loans for renovation and rehabilitation at below-market interest rates through its Housing Finance Agency or a similar agency. Call your governor's office to get the name and phone number of the agency in your area. ...


Does the federal government offer home improvement programs?

Yes. Among the most popular: ...


What about using an unsecured loan?

The interest rates on these loans are often higher than on secured loans and you generally will not be able to get a tax deduction for the interest paid. However, the costs to obtain an unsecured loan are usually lower. And the relative ease of getting this type of loan ...


How can I finance work needed for home repairs?

According to the Millennial Housing Commission created by Congress, few lenders are willing to administer home improvement loans. Most prefer to make home equity loans or unsecured consumer loans because they are easier to manage. Home improvement loans usually require inspections and irregular draws on the loan amount as work ...


Is private mortgage insurance always required on low-down payment loans?

Lenders require private mortgage insurance (PMI) on most loans with less than a 20 percent down payment. They believe there is a correlation between borrower equity and default. They have found that the less money borrowers put down, the more likely they are to default on a loan. PMI guarantees ...


Do builders provide financing?

Many builders offer financing incentives to help move more buyers into a project. In fact, major building companies often have their own mortgage brokerage subsidiaries, while many other builders routinely refer buyers to "preferred" local lenders. If it is a buyer's market in your area, you can be sure developers ...


What about Freddie Mac?

Freddie Mac, Fannie Mae's counterpart, also offers low or no-down-payment home loans through partnerships it forms with various state governments to expand homeownership opportunities across the country, particularly for those persons with low or moderate incomes. ...


How can Fannie Mae help homebuyers?

The Fannie Mae Community Home Buyers Program lets first-time buyers with little cash obtain 95 percent financing. Borrowers may put down as little as 3 percent of their own money, with a 2 percent gift from family, a government program, or nonprofit agency, and obtain private mortgage insurance to protect ...


What are mortgage credit certificates?

A mortgage credit certificate, or MCC, makes it easier for eligible buyers to qualify for a mortgage loan. Offered by many city and county governments, they allow first-time buyers to take advantage of a special federal income tax write-off. ...


Can you tell me more about FHA and VA?

The Federal Housing Administration (FHA) is an agency within the Department of Housing and Urban Development (HUD). Its main goal is to help provide housing opportunities for low- to moderate-income families. FHA has single-family and multi-family mortgage programs but does not generally provide mortgage funds. Instead, it insures home loans ...


Do government programs exist that can help me finance a home?

Yes, although many are designed to assist first-time homebuyers, generally defined by lenders as people who have not owed a home in three years. ...


Is a home equity line of credit similar to a second mortgage?

A home equity loan, like a second mortgage, lets you tap up to about 80 percent of the appraised value of your home, minus your current mortgage balance. But because it is set up as a line of credit, you will not be charged interest until you actually make a ...