Can I Get a Mortgage After Bankruptcy?

Can I Get a Mortgage After Bankruptcy?

While declaring bankruptcy can negatively impact your credit score in the short term, you may still qualify for a mortgage loan. However, it will take some time and effort. How long a bankruptcy keeps showing up on your credit report depends on the type of bankruptcy filed. Chapter 7 bankruptcies remain on credit reports for as long as 10 years while Chapter 13 bankruptcies remain on credit reports for seven years.

Mortgage Options for Bankruptcy Filers

Unless you are a veteran or have a large amount of money to put down on a home (30% or more), you won’t be able to obtain a mortgage approval immediately after bankruptcy. Additionally, which kind of loan program you pursue will dictate how long you must wait. 

For example:

  • Fannie Mae and Freddie Mac (Conventional loans) will not accept mortgage applications from people who filed a chapter 7 bankruptcy until four years after discharge and two years after a chapter 13 was discharged.
  • Federal Housing Administration (FHA) loans may shorten your waiting period to one year if you filed a chapter 13 or were forced to file bankruptcy due to losing your job. However, the FHA will expect you to show that you have found steady employment following bankruptcy. You must still wait two years after a chapter 7.
  • Department of Veteran Affairs (VA) may give you a loan immediately after a chapter 13, but you will need to wait two years after a chapter 7 and provide evidence of re-established credit.

How to Improve Your Chances of Getting a Mortgage Loan after Bankruptcy 

  • Keep your new credit record spotless. Pay all bills on time and avoid racking up credit card debt. Also, check your credit record often to ensure it is accurate.
  • Make a down payment. While down payments do not matter a great deal when applying for an FHA mortgage loan, applying with a decent down payment can only help your chances of getting approved for a mortgage after bankruptcy. 
  • Be honest and transparent. Get ready to answer questions regarding the circumstances of your bankruptcy. Lenders will ask what happened to make you file for bankruptcy, if you have established new credit, and whether you are currently behind in any of your bills—including utility bills. You will also be asked to provide all paperwork and court orders related to your bankruptcy.

Helpful Central Florida Mortgage Lenders 

For over 25 years, Butler Mortgage has helped both seasoned and first-time buyers achieve Central Florida homeownership. If you’ve gone through bankruptcy, we can work with you to find the best loan solution to fit your needs. For more information about obtaining a mortgage after bankruptcy, contact Butler Mortgage today by calling 407-931-3800 or by filling out our free consultation form online.

Is Fall a Good Time to Buy a Home?

Everyone has a different idea of what their ideal home looks like, but finding the best deal is something that any potential homebuyer can agree with. If you’re on the hunt for a great property price with some added bargaining power, check out our top reasons to buy during the fall.

End-of-Year Incentives

During the holidays and heading toward the end of the year, sellers may be more motivated to negotiate so that they can complete their sale and start a new year fresh. Just like buying a car at the end of the month, you can use the calendar to your advantage and negotiate a better deal. With more motivation to come up with cash and free up their holiday schedule, sellers are likely more willing to bend when it comes to price or closing costs assistance.

Less Competition

Buyers typically enter the housing market during spring and summer, often wanting to close on their purchase before the new school year starts. By waiting until fall, you’ll have less competition, meaning the chances of you getting into a bidding war with other buyers will be reduced. This allows you to spend more time weighing your options, evaluating each piece of property, and sorting your finances. Also, with less buyers in the market, real estate agents will have more time to find you the perfect piece of property in your price range.

Off-Season Bargains 

Spring and summer are the busiest times of year for real estate, but that doesn’t mean they’re necessarily the best times to buy. In fact by waiting for fall to roll around, you might have even more buying power. Sellers with homes that have been up for sale will be eager to close the deal and even discount their homes, which gives you a better chance to bargain shop. Of course, there are still a ton of new homes that go up for sale in the fall season, which means you can have your pick from the most diverse property pool.

Year-Round Mortgage Professionals

If you think that fall might be the right time for you to start looking for a home, partner with the mortgage professionals at Butler Mortgage. We’ve helped first-time buyers and seasoned property owners navigate the market, regardless of the season. To get started on finding your perfect home loan solutions, fill out our online contact form or call 407-931-3800.

Why Rising Rent Prices Means It Is Time to Buy

 

According to a recent Freddie Mac report, Orlando is the fifth most rent-burdened metro area in the United States. As cities throughout Central Florida share drastic rises in rent, tenants are questioning whether  they should renew their leases or jump into homeownership. If you’re contemplating an upgrade from a lease to a home loan, here are a few great reasons to make the switch.

Stop Paying Someone Else and Start Building Equity

Instead of being locked into a lease that increases year after year making it hard to get ahead, consider locking in a low mortgage rate and putting your monthly payment towards an actual investment. As you pay down your mortgage, you are essentially paying yourself by building equity in your home. In fact, home equity is the largest asset for a majority of Americans.

Take Advantage of Relaxed Mortgage Guidelines

There are countless mortgage options to suit first time or repeat buyers. The two agencies that support most of the mortgages in the United States, Freddie Mac and Fannie Mae, have relaxed their guidelines in recent years, allowing for higher debt to income ratios. Additionally, both Freddie Mac and Fannie Mae now allow applicants to finance even more of their purchase price, up to 97%, which makes it a great time to purchase a home with very little money out of pocket.

High Rents, But Low Rates

Supply and demand is driving rent prices into historical highs, but the opposite is happening with mortgage rates for various reasons. Rates are at a nearly historical low for loans of all terms. Take advantage of this now before rates start going back up. An increase in a mortgage rate of even 1% could cause you to pay hundreds of dollars more each month on your loan.

Get Started on Mortgage Applications

If you’re ready to outsmart Central Florida rent, partner with the mortgage professionals at Butler Mortgage. Our team can walk you through a series of mortgage solutions until you select an option that fits your finances. For more information on your mortgage decision, complete our free consultation form or call 407-931-3800.

Things to Consider When Buying an Investment Property

Things to Consider When Buying an Investment Property

Taking a different route to the traditional payday isn’t easy, but it can be incredibly rewarding. If you’re ready to take on the role of landlord or want to start flipping the fixer-uppers in your city, here are the top things to consider when buying an investment property.

Steady Income

Investment property income isn’t the same as your usual bi-weekly paycheck. In fact, if you can’t manage to flip your property or sign tenants in a reasonable time frame, you could end up going weeks or even months without any cash flow. If you steadily rely on hourly or salaried wages, consider whether you can afford to take time away from those obligations and dedicate time to your investment.

Property Location

If you want to manage your own property, consider starting off with an investment property that isn’t too far from where you live. Also, if you have a particular type of tenant in mind, make sure that the area in which you intend to purchase has amenities or attributes from which the renters can benefit. For example, if you want to rent to a responsible, small family with stable income, search for properties with nearby schools in safe, clean neighborhoods.

Unexpected Expenses

Even if your property passed a pre-purchase inspection with flying colors, you may still run into some home hiccups once the keys are in your hands. For example, your fixer-upper can easily turn out to be a bigger project than you thought, or one of your larger appliances might give out on the newly signed tenants. Since these things can arise without warning, you need to have a savings cushion to help you weather such unexpected events.

Insurance Coverage

When shopping around for an insurance policy, consider whether you can afford to pay a little bit more each month for better coverage versus a low premium policy in which you will have to pay a larger sum in the event of an accident. Also, remember that when you’re purchasing a piece of property in an area prone to natural disaster damage, you might be facing higher insurance premiums for essential coverage. However, you should still shop around to find the best available rate for your financial situation and property plans.

Your Goals

Are you looking to turn an investment property into a full-time job? Are you looking for a stable source of additional long-term income? Whatever reason you decide to start investing in property, make sure to consider whether it is possible to satisfy your overall goals before making the purchase. For example, if you’re a risk-averse, first-time buyer, don’t start shopping for a home without understanding how it can fit into your one-, three-, or even five-year plan.

Mortgage Options

One of the most important things to consider when buying an investment property is how you plan to finance your purchase. Fortunately, you can find the right mortgage solution by teaming up with the professionals at Butler Mortgage who have been helping people finance primary homes, second homes, and investment properties for over 25 years. Our expert team will guide you through financing options to help you purchase your first investment property. Contact us online for a free consultation or call 407-931-3800.

FHA Revises Condo Requirements

FHA Revises Condo Requirements

FHA loans are one of the strongest financing options for first-time buyers, and condominiums are one of the most affordable and easily maintained property options—but FHA-backed condo loans have not always been an easily accessible mortgage solution. However, with new FHA updates from the Department of Housing and Urban Development (HUD), the condo approval process is about to change in a lot of ways.

Expanded Access

Under previous FHA guidelines, condo certifications only lasted for two years before developers or project owners required re-certification. Fortunately, the FHA will extend the condo certification window another year, giving project owners a three-year period before requiring re-certification. And when reapplying, developers will no longer have to resubmit a complete application; they’ll just need to upload the amended information.

Spot Approvals

According to the current FHA regulations, buyers are ineligible to obtain a single-unit FHA loan if the entire complex isn’t already FHA approved. With the new FHA amendments, spot approvals allow the FHA to approve single condo units within a community; however, the amount of units eligible for FHA insurance varies depending on the total units in the complex. For example, in unapproved projects with over 10 units, no more than 10% of units are eligible for an FHA loan. And in unapproved complexes with under 10 units, no more than two units are eligible for an FHA loan.

More Options

The new FHA guidelines are opening up a lot of incredible homeownership opportunities for first-time buyers, allowing them to easily finance in mixed-use developments and complexes with lower owner/occupant ratios. And now that more condo units will have the opportunity for approval, HUD projects that more condo projects will start appearing in development.

FHA Approval

Starting mid-October, condo financing may be more affordable and more available to countless buyers, which means now is the best time to get approved. If you want a head start on the condo market competition, partner with the mortgage professionals at Butler Mortgage. We can guide you through the approval process or help you find another financing option that best suits your situation. To learn more about the new FHA amendments or to find a different mortgage solution, complete our free consultation form or call 407-931-3800.

Understanding the Updated 2020 VA Loan Limits

Updated 2020 VA Loan Limits

There are multiple benefits available for veterans securing a VA loan and recent updates make VA mortgage loans an even better choice for some.  To better prepare veteran borrowers for their next big purchase, let’s take a look at what the 2020 VA loan limit changes mean for upcoming applicants.

The 2020 VA Bill

Earlier this year, the Senate and the President approved the Blue Water Navy Vietnam Veterans Act to award veterans with higher benefits in healthcare and homeownership for 2020. The bill removed the previous loan limit of $484,350, allowing the Department of Veteran Affairs (VA) to support veteran borrowers seeking larger home loans.

VA loan limits represent the maximum zero-down amount that the VA can guarantee regarding good credit risk, but this does not represent the amount that a lender is guaranteed to approve. The final approval decision is still in the hands of mortgage lenders.

VA Loan Fees

As of January 1, 2020, veterans in nearly every county in the United States will be able to borrow at higher amounts—without making a down payment. However, removal of the loan limit comes at a small price to borrowers in the form of additional loan fees. Per the 2020 changes, the funding fee without a down payment is set at 2.30% for first-time users and 3.60% for subsequent users.

Spouses of veterans who died in active duty or suffered fatal disabilities from their service may be eligible to have these fees waived. Similarly, active-duty Purple Heart recipients will also be exempt from these fees, but there are other loan requirements that all veteran applicants must keep in mind. Regardless of the loan limits or applicable funding fees, borrowers must meet standard lender requirements regarding credit and income to qualify for VA mortgage loans.

VA Loans in Central Florida

Finding the right mortgage product to purchase or refinance a home can be difficult when the options and limitations are constantly changing. Fortunately, the loan experts at Butler Mortgage are here to help Central Florida citizens make the best borrowing decisions. Whether you’re looking for a VA loan or any other mortgage solution, our team of loan professionals will guide you through the optimal mortgage options for your finances. Call us today for a free consultation at 407-931-3800.

How to Qualify for a Mortgage When You’re Self-Employed

How to Qualify for a Mortgage When You’re Self-Employed

Anyone gearing up for a mortgage application is going to take some time to prepare their information, gather necessary documents, and comb through their credit reports. However, for those who write their own paychecks, the process can be a little trickier. With a few more hoops to jump through regarding income, credit, and borrowing in general, the lending process can easily deter any self-employed mortgage applicant. So, here’s our guide to qualifying for a mortgage when you’re your own boss.

Adequate Income

Although writing off expenses decreases your taxable income, it also decreases your provable income. Lenders don’t care about your gross earnings; they care about the number that you take home, which means you’ll have to prioritize whether you want to save more on taxes now or qualify for a home later. If you want your mortgage application to look its best, you’ll need to show that you have as much net income as possible, even if you’re going to pay a little more in taxes.

Necessary Documents

When applying for a mortgage, salaried workers must provide W-2’s and their personal tax returns for the past two years to show that they have both adequate and constant income. Self-employed borrowers must provide the same items as well as their business tax returns (all schedules) for the past two years.  If they are a sole proprietor, the schedule C in their personal returns would be sufficient.

Lenders don’t deny applications for having too much proof of income, so save any business documents that you feel may be beneficial to your mortgage application.

Borrowing History

Credit plays a big part in mortgage qualifications whether you’re self-employed or not. Therefore, it’s essential that you work to lower your debts and improve your score as much as possible before you begin the home buying process. Since your financial history will be under a microscope when applying for a mortgage, you must examine each of your credit reports, avoid closing or opening any new accounts, and continue making timely payments on each of your existing ones.

Down Payment

As a self-employed borrower, you don’t have to put more money down to walk away with the same deal as a salaried applicant. However, most lenders are much more likely to approve loan requests when the applicant is willing to put down more money because it minimizes the likeliness of a mortgage default. Therefore, while you’re planning to purchase a home, consider saving up for a larger down payment to strengthen your application.

Proper Planning

Buying a home isn’t a spur of the moment decision, which is why you should start planning now. By teaming up with the professionals at Butler Mortgage, you can prepare for your purchase to be way ahead of the application game. Whether you’re self-employed or in a salaried position, our team of loan experts can guide you to the best decisions for your long-term purchase and financial future. Contact our team for a free consultation by calling 407-931-3800.

Do My Tax Returns Affect My Mortgage?

Do My Tax Returns Affect My Mortgage?

If you apply for a mortgage here at Butler Mortgage (or any other lender in the U.S.), we will likely request your tax returns before offering any financial assistance. While you would think that normal financial documents cover everything needed to get a mortgage, the last two years of your tax returns are required for most mortgage loan products and paint a more detailed picture than typical income documentation like paystubs. Let us explain why your tax returns are crucial for your mortgage application.

What Part of My Tax Returns Are Needed?

We need to see all pages of your tax returns so that we can determine how much you can afford for your monthly mortgage. Generally, you will have to provide the last 1–2 years of personal tax returns, business tax returns (if you own more than 25% of one), and W-2s or 1099s. These documents let us see if you have a steady income that can sustain future mortgage payments. They also alert us of any write-offs and deductions, which may not be useable when calculating your income for qualification purposes.

How Do My Tax Returns Help Me Qualify?

When we look at your tax returns, we are looking to pull out key pieces in order to construct your total monthly income as it is defined in federal mortgage lending guidelines. Once we have that number, we are able to determine your debt-to-income ratio, or DTI. This is calculated by dividing your monthly debts (including your future mortgage) by your average income in a month. While we can work with a range of different DTI percentages, a lower ratio will allow for a higher mortgage and is more appealing to an underwriter, especially when other areas of your application, such as credit or assets, are not as strong as they could be.

Central Florida Mortgage Lenders

Getting a mortgage can seem like a daunting process, especially when lenders want to dig through your financial information and history. However, our goal at Butler Mortgage is to help you achieve your dreams and get a mortgage loan.  Your financial records are crucial to making that happen. We are experts at analyzing even the most complex tax returns and will work with your situation to figure out the best plan for your future. Contact us today and request a free consultation at 407-931-3800.

3 Big Tips for First Time Home Buyers

3 Big Tips for First Time Home Buyers Orlando Florida

Buying a house for the first time can be a daunting task. The initial down payment, closing costs, and mortgage rates all have large price tags attached and are full of minute details that can be missed by the average customer. The last thing you want is for your first home to put you into excessive debt and set back your financial future. With the help of an experienced mortgage professional, a real estate agent, and these important tips, you can feel confident as you search for the home of your dreams.

Start Saving ASAP

Long before you plan on buying your first house, you need to build up some savings to make your initial purchase. While there are many different options in the market allowing for a lower down payment, many first time homebuyers forget that there are closing costs as well.  Figure on adding an extra 3 to 3½% of the purchase price for closing costs. Dedicated saving can help prepare you for the down payment and other fees.

Choose a Smart Mortgage Plan

When looking at mortgage options, the temptation will be to spread your payments over a long period of time. Even though the monthly payments will be lower, you will end up paying far more money in the long run with a 30-year mortgage than a 15-year one.  Discuss with your mortgage professional the various term options such as 20 or 25 year mortgages if the payment on a 15 year loan is too steep. Another option is an adjustable rate loan, which can save a borrower thousands of dollars over the life of the loan.  However, if you are risk-averse and would rather have a steady payment, aim for a fixed-cost conventional loan mortgage. This will ensure that your mortgage rate will not inflate over the course of your payment schedule.

Find Your Dream Home

Buying a house is a long-term commitment, so it is imperative to find a place that checks off as many of your important desires as possible. Be cognizant of the location, neighborhood, local schools, and other factors that are major components of your life, not just the home itself. As the famous real estate saying goes, the three most important parts of a property are its location, location, and location.

Central Florida Home Mortgage

Getting your first home can be intimidating, but with the right team of professionals at your side, you can have an enjoyable experience and find the home of your dreams. Here at Butler Mortgage, we can help you through this process and determine the best financial plan for your situation so that you can begin your new life in your first home with financial security. Call us today for a free consultation at 407-931-3800.

What Is a Freddie Mac Home Possible Mortgage?

What Is a Freddie Mac Home Possible Mortgage?

Getting a first mortgage can be a difficult task. Raising the necessary funds to make the first down payment can be stressful for some people, and if you do not have a great credit score or are relatively unestablished, this can become an even more frustrating process. However, there are ways to finance a home purchase other than a traditional mortgage. Here are some details about one of these programs: the Freddie Mac Home Possible mortgage.

Home Possible Specifics

A Freddie Mac Home Possible mortgage is a way for lower-to-moderate income clients to get their first mortgage when other paths are out of reach. The main advantage of this loan is the low down payment: it only needs to be 3% of the cost of the home. Freddie Mac loans also have more flexible credit requirements than traditional loans, which can especially help young people who are relatively unestablished have their mortgage application approved.

Qualifications for Freddie Mac

In order to get a Freddie Mac Home Possible mortgage, you must meet certain criteria. To begin, the annual income of the buyer must not be greater than 100% of the median income limits of the surrounding area. However, this restriction might not apply in underserved areas. In addition, you cannot have over 43% to 45% of your income going towards debts, but you might be able to qualify anyway if you consult loan professionals. Also, you must also be a first-time homebuyer and take a homebuyer course online or in-person.

Apply for a Home Possible Mortgage

If you deeply desire to be a homeowner and think that you could qualify for a Home Possible mortgage, the most important step is to contact a knowledgeable mortgage professional and apply. A Freddie Mac Home Possible Loan can help you buy your first home when you didn’t think it would be possible financially. Here at Butler Mortgage, we can help you determine if you are eligible for a Freddie Mac mortgage and then guide you along the process towards owning your first home. Call us today at 407-931-3800 for a free consultation!