For those not familiar with the Carnival of Real Estate - the basic idea is for one blogger to evaluate blog posts and then present the top entries for that week. It is a weekly "competition" of sorts and offers a great venue for learning about other bloggers and imitating their success. At the basic level, CoRE is a great way for the host to learn about new bloggers and a wide range of topics. For the writer, it offers exposure to a a whole new audience and if you are selected that week, the link love can be priceless! A win win for all parties.

I would encourage any serious blogger to participate in the CoRE on a regular basis and also to host one. Visit the Carnival of Real Estate website for details.

I  hosted the CoRE this week at my Arizona Mortgage Guru blog. Here is an excerpt: 

The Carnival of Real Estate rolled into town again in Phoenix. From Super Bowls, BCS Championships and numerous other sporting championships, our area is very familiar with hosting big time events. Heck we’ve even already hosted multiple carnivals! Now how many cities can say that?

This time the carnival arrived in a most interesting holiday - Halloween. While the theme is not entirely Halloween related, I did include a “scary” category to my selections. There were exactly thirty entries and the quality of posts were very good. I have selected my top three picks and then provided honorable mentions by category.

Visit the blog for the complete list of this weeks winners!  

With the subprime mortgage market pretty much gone, first time home buyers or borrowers with challenging credit may think their options are limited. This is not true. In fact the Federal Housing Administration (FHA) loan is a great program for first time homebuyers, borrowers with low credit scores, and those needing down payment assistance.

So, how do you know if the FHA program is right for you? Well, the FHA loan looks at four elements of the borrower. I call it the four corners of a mortgage.

Credit - This is the first corner. FHA is not a credit score driven system. In fact  it's better to have no credit than to have very bad credit. As long as you have decent credit then you can be considered for a FHA mortgage.

Employment/Income- This is a very important corner. FHA looks at bot the length and stability of employment. It is importnat ot be able to establish at least two years of consistent income. FHA can even help self-employed individuals.

Assets - It is always a good idea to demonstrate that you have two months of mortgage payments saved up. However, you do not need down payment money, as FHA allows down payment assistance from non-profit organizations.

Property - One distinguishing feature is that FHA allows for manufactured homes. The main requirement is that the home needs to have a stem wall. Only FHA qualified appraisers can be used to perform the appraisal as the appraisal needs to meet certain FHA requirements. Otherwise all other property types are acceptable to FHA.

As I said the FHA program looks at the overall picture. So, do not think you do not qualify based on just one factor. Call an experienced mortgage professional in in your area and they should be able to guide you.

Remember, not all lenders are FHA approved. If you feel you qualify for a FHA loan but the loan officer doesn't present that to you as a financing option then make sure you ask why it is not on the table. It would be worth your effort to then contact a FHA approved lender. Additional information on FHA loans can be found on the HUD website.

The Arizona Mortgage Guruis the blog identity of Shailesh Ghimire. He and his wife, Aimee, are home mortgage loan experts in the Phoenix, Arizona area.

The mortgage market remains in flux. Refinancing a subprime loan into a regular conventional mortgage is the big topic here in the Phoenix, Arizona market. The Arizona Mortgage Guru addressed this issue with a practical six step guide on how to refinance a subprime mortgage. The refinance post received heavy traffic, so it's on a lot of borrowers minds, however, the Arizona Mortgage Guru also wrote some very relevant posts for borrowers.

1. Facing Foreclosure? 12 Things You Should Know When You Call Your Lender - The Mortgage Bankers Association has created a foreclosure avoidance center website. Under this page it has published a twelve-step guide on the things you need to know when you call your lender. This should ease your fears a bit. Read full article.
   
2. Mortgage Forgiveness Debt Relief Passes US House - I have been following the progress of the Mortgage Forgiveness Debt Relief Act, and I'm happy to tell  you that it passed the US House. It is now headed to the Senate. I'm pretty sure it'll pass and I'm sure President Bush is pretty eager to sign this one into law. Read full article.
   
3. FHA's Upfront Mortgage Insurance Premium and Monthly MI- FHA under the 203b, 234(c), & 203k programs charges an upfront MIP equal to 1.5% of the loan amount. If you end up selling the home or refinancing the loan within the first 84 months (7 years) you are entitled to a refund of the balance. MIP can be wrapped into your loan, but you have the option to make a cash payment at close as well. Read full article.
   
4. Bad Credit Can Cost You Your Next Job and Your Dream Promotion - Not only can bad credit cost you big bucks, it could even cost you that new job you want or the promotion you've been working so hard to get.  It's hard to believe, but it's true, more and more employers are pulling credit and screening out job applicants. Read full article.
   
5. Refinance Your Subprime Mortgage in Six Easy Steps- I have prepared a checklist of six things you need to do so you can make a smooth transition from an adjustable subprime mortgage to a conventional one. This is not a quick fix, I suggest you allow six months to get all this in order. As I explain you'll see why. Read full article.
   

Whether purchasing a home, refinancing a home loan or wanting to look at investment properties, Aimee and Shailesh at CTX Mortgage can do it all. You can reach the Phoenix home mortgage lender at (480) 516-1819. As always, the Arizona Mortgage Guru Blog has relevant, smart and insightful comments, commentary on your home loans. Be sure to visit often

"I have an adjustable rate subprime mortgage, the interest rate and payment will adjust soon.  I need to know the options available so I don't find myself strapped to make my mortgage payment."

Recently I have received quite a few inquiries along the lines described above. I've guided a few borrowers through a subprime to FHA re-finance process. If you find yourself in a similar situation, I want to share with you a checklist of six things you need to do so you do the right mortgage re-finance from an adjustable subprime mortgage to a conventional one. This is not a quick fix but will be very rewarding. I suggest you allow six months to get all this in order. As you review my steps you will see why.

Step 1: Understand Your Current Situation - I suggest you review the details of your current mortgage first. If you are in an adjustable rate mortgage you need to know exactly how much you will owe and when the interest rate will adjust. You also need to know if there is a pre-payment penalty with the loan and when this will expire. I would also suggest calculating the new monthly payment with the adjusted interest rate. To calculate this use the calculator on my website. This will help you know exactly how much time you have.

After you have gahtered all this information you will be in a much better position to make a workable plan.

Step 2: Review Your Credit - Even if you have six months left before your interest rate adjusts you should still check your credit report. The more time you have before the mortgage adjusts the more opportunities you will have to fix any potential credit issues. Remember you are entitled to a free credit report every 12 months, take advantage of it at AnnualCreditReport.Com. If the timing is closer then you may want to contact a mortgage professional and review the credit report with them.

Step 2 (b): Manage Your Credit - Once you have a credit report, the first thing to do is check for any errors in your report. If you find errors then contact the creditor and ask them to fix it, they must respond to your request within 30 days (take good notes). After addressing any errors you need to make sure you review my "Seven Ways to Destroy Your Credit" and do the exact opposite. Believe me when I say improving your credit can end up saving you thousands of dollars.

Step 3: Stabilize Your Income/Employment and Assets - Most lenders like to see stable employment and at least two months of expense reserves in your account. Remember that if you are a 1099 employee you will be treated as self-employed and many programs will require you to furnish tax returns.

For those of you who receive only cash income you need to follow my advice on documenting cash income so lenders can establish your income stream. W2 employees need to make sure they stay that way. Lenders will frown on you if you switch from a W2 to 1099 right before a mortgage application.

Step 4: Check Your Homes Value - This is pretty important these days and can make or break your re-finance transaction. The good ol' days of home appreciation is behind us. Don't rely on rumors or "he said, she said" for this either. Just because a house a few doors down sold for a certain amount doesn't mean your house will get the same value. There is more to an appraisal when it comes to determining price. Be prepared for the unexpected, but also know that there are ways for you to improve the value of your home.

If you are in the Phoenix, Arizona market, call me and I can get you in touch with a certified appraiser. Otherwise, contact a CTX Mortgage loan officer in your market and they can get you in touch with a qualified appraiser in your area.

Step 5: Review all Financing Options - Lower documentation loans especially when it comes to higher loan to value is difficult to obtain these days. What I mean is tha tif you need more than 90% of the home value to re-finance your loan then things will be tough. So, the best option for you will be to go with full documentation verification.

The three best options in todays market is the FHA loan, MyCommunity loan and a Fannie/Freddie fixed mortgages. If you think you qualify for the FHA Secure initiative, then go through the five step checklist.

Ask the mortgage person you end up working with lots of questions and don't fall for any gimmicks (like no closing costs, no credit check etc.) There is no such thing as a free lunch and you don't to pay for something you don't need. Depending on your time frame don't get rushed into something you do not understand. My advice is that if you don't understand it then ask until you do or walk away from it if the person can't explain it to your satisfaction.

As you can see these six steps can help you re-finance a subprime mortgage into a fixed conventional mortgage. I hope you now see what you need to allow yourself six months to complete these six steps. If you follow my six steps you'll be in the drivers seat and much better off on your next mortgage transaction.

H/T: Blown Mortgage for inspiring me to finally put this article together.

Visit the Arizona Mortgage Guru blog for all your home financing options.