This can be summed up in one word – Yes. Aggressive programs from aggressive lenders makes money available for people who have filed a BK.

A bankruptcy does not exclude you from getting a mortgage. It simply means you are a higher risk to the lender. Your rate may be higher, the fees a bit higher but the mortgage can still be obtained.

You will often want to plan a two step strategy when refinancing out of bankruptcy. Refinance once now to get your affairs in order, pay off debts, lower your overall monthly expenses, and help you rebuild your credit, and then a second refinance in two to three years to take advantage of your new credit score and any additional equity in your home you may have built or gained through appreciation.

It is also possible to refinance while you are currently in a chapter 13 bankruptcy. You will have to get permission from the bankruptcy court and show that you have made payments into the plan on time for at least 12 months. Keep in mind that the maximum loan to value on these types of loans are typically from 70%-80% depending on the lender.

To offset some of the higher rates that you may get after filing a bankruptcy you may choose to go with a short term arm such as a 2/28 or 3/27 where the payment is fixed for 2-3 years and at that point you can come back and refinance into a program that better fits your needs.

The type of bankruptcy that was filed will be the first determining aspect in deciding what type of mortgage financing you qualify for.

There are many programs that allow up to 100% financing 1 day out of a bankruptcy. Of course your credit score needs to be able to support this also. Basically if you have managed to straighten out your credit since the bankruptcy it is possible to have a decent credit score by the time your bankruptcy is paid off.

Getting a home loan after bankruptcy is not too difficult with sub-prime lenders, although the borrower should expect to pay a higher interest rate. Because of the high bankruptcy mortgage interest rates, when choosing different types of bankruptcy home loans, potential borrowers should expect to refinance the mortgages to lower interest rates after they have a chance to rebuild their credit in a couple of years.

Your chances for home financing will increase if you carried some accounts through the bankruptcy. Some lenders will also use your cancelled rent checks for a trade line.

On a chapter 7 bankruptcy lenders usually look at the discharge date and not the file date. On a chapter 13, a lender may look at the file date unless the chapter 13 has been dismissed. Your mortgage broker will be able to get the best lender for your particular situation.

If the increased minimum payments on your credit cards are more than you can afford you may consider refinancing. You may be able to refinance and use the cash out of the equity of your home to pay off your credit cards.

After you pay off your credit cards it is smart to lower the credit limit or cancel all but two cards. You want to avoid making the same financial mistakes twice.

With the increase in credit card payments and many American homeowners starting to feel the “pinch”, now is a great time to look into doing a cash out refinance or to look into obtaining a 2nd mortgage or Home Equity Line of Credit. One of the benefits would be that this will help to reduce your overall monthly expenses. Another benefit of consolidating your credit card debt is that most 1st mortgages, 2nd mortgages, and home equity lines of credit give you a grace period of up to 15 days unlike credit cards that will increase your rates if you are even 1 day late with your payments. One more benefit is that the interest on the mortgage may be tax deductible.

Rolling your unsecured debt such as credit cards into a secured debt such as a second mortgage may also have tax ramifications. Ask your mortgage professional or tax professional for more information.

When refinancing and consolidating your credit card debt you typically save money each month which can then be used to pay down your mortgage faster. Just one extra payment per year on your mortgage can shorten your overall mortgage payments by several years in turn saving you thousands of dollars.

To be inactive on your paying off high credit card debt has many negative financial effects.

Also, with the new bankruptcy laws enacted in October 2005, you may not be able to roll those credit cards into bankruptcy as easily as you could have prior to the new bankruptcy laws. If you have equity in your home, consolidating your bills would be the best way to eliminate debt and get a tax deduction.

The other major advantage when paying credit cards through your mortgage, besides the obvious payment relief, is that you turn non tax deductible interest into interest that is – in most cases – tax deductible.

With the new regulations credit card minimum payments are increasing 2% of the outstanding balance to 4%. So, your credit card payment just doubled.

Interest rates on mortgages are much lower than those on a credit card. Not only will you save money by paying less interest when you refinance, but the interest on your mortgage is tax deductible, which means even more savings.

Editors Note: Due to the mortgage and credit crunch, loans such as the cash advantage loan may no longer be available. If you’re in need of a Denver mortgage loan contact us to discuss your mortgage options.

The cash advantage loan will allow you to finance your home and receive a check up to 2% of the loan amount after closing. The benefits for this mortgage option would be if a first-time home buyer needed to furnish their new home or had minor home improvements.

When refinancing some borrowers only qualify for a rate and term refinance, with a cash advantage loan the borrower will still be able to receive 2-5% of the loan amount.

Many of our programs allow up to a 5% seller’s concession on 100% purchases.

Cash advantage loans are useful for debt consolidation. Cash can be taken out to pay off high interest credit cards versus the lower interest rates available on mortgages. Plus the mortgage interests are tax deductible which means more savings.

In Texas no cash is allowed back to the borrower when refinancing unless the borrower is taking out a Texas home equity loan. Texas home equity loans are limited to 80% LTV of the property and have more stringent requirements.

Other sites: Loan Officer | Increasing your homes value | New Credit Card Minimum Payments | Why choose a mortgage Broker| Pay Option Arm Calculator

Editors Note: Due to the mortgage and credit crunch, Cash-Out Refinances may be harder to obtain. If you’re in need of a Denver Refinance contact us to discuss your mortgage options.

With a Cash out-Refinance the money you get at closing can be used for many purposes such as future investments, College, or debt consolidation. Money can be used to pay off current monthly debt which could lower your personal Debt to Income ratio. Consult a Mortgage Professional in regards to how much you should extract from the equity built into your home.

You can get cash out through a first mortgage, a second mortgage or a home equity line of credit (helot). Some lenders will require that you stay within certain loan to value (LTV guidelines) for cash out. Conforming limits are 90% LTV and FHA cash out is limited to 85% LTV. Many subprime lenders will go to 100% cash out with good credit.

Whenever you take a decent amount of cash out from your home, your LTV (loan to value ratio) will probably exceed 80%. To avoid paying mortgage insurance on these loans, many borrowers split the amount borrowed into two loans, a first and a second. Typically, the first mortgage has a LTV of 80%, but there are loan programs where having the first mortgage at 70% LTV offers more favorable terms to the borrower. The lower the LTV ratio, the less risk the lender will have in offering you a loan.

FHA update on October 31, 2005 allowing for a cash out refinance to go as high as 95% LTV. Previously the guidelines only allowed for a maximum of 85% LTV. These changes will allow many borrowers to take advantage of the equity in there homes and still obtain low rate financing.

Taking cash out on a home refinance is one of the many factors a lender takes into account when evaluating the risk of the loan. In certain situations, taking cash out may cause the lender to perceive the loan to be of higher risk. This could result in a slightly higher interest rate or additional restrictions on qualifying for the loan.

Since payment on cash out refinances can be spread across over up to 40 years, it is often advisable to use the proceeds for investing in something enduring. Using cash out from home equity for Value adding home improvements or for financing a new business are excellent options whose benefits you will continue to reap long after the last payment is made.

Besides setting the maximum LTV limit with Cash-Out Refinances, some prime lenders also limit the maximum cash-out dollar amounts.

Some non-conforming lenders will allow cash-out up to 125% of the value of your home.

Cash out Refinances can help many people better their financial situations by improving their monthly cash flow. However, many of these borrowers after paying off high interest rate debts often find themselves in the same situation down the road because of a failure to control their use of credit. These people wind up being in a worse situation because now they have no equity in their home plus high interest rate debts to pay.

If you’re looking to take out unlimited cash out when refinancing consider a rate and term refinance of your first mortgage and a home equity loan second mortgage option. Taking cash out proceeds from your second mortgage allows you to get a better rate on your first mortgage.

Editors Note: Due to the mortgage and credit crunch, mortgages after bankruptcy are difficult to obtain. If you’re in need of a Mortgage in the Denver area contact us to discuss your mortgage options.

Often time’s people are so far in debt that they can never repay their debt. At this point the best solution may be to file a Chapter 7 Bankruptcy. A Chapter 7 is very detrimental to your credit rating, but you are typically out of Bankruptcy in 6 months and you don’t have to repay any debt. However the disadvantage is that this will show up on your credit report for 10 years from the date of filing your BK. With creditors starting to tighten their credit requirements, and you will be limited to certain types financing.

Although Chapter 7 bankruptcy will severely damage your credit rating, you need to determine what’s worse – killing your credit with constant late payments and high debt, or by filing chapter 7 bankruptcy and getting rid of your debt.

Many consumers can still obtain home loans after a chapter 7 discharge.

Chapter 7 bankruptcy isn’t intended to let you rack up debt and then get out of it without having to repay anything. It is there as an option to give you a fresh start. Unfortunately, many people don’t see it that way, and get trapped in the cycle of racking up debt and then filing for bankruptcy. However, you can only file once every 7 years, so be sure that if this is your only option, you use it as a stepping stone to move on to a better financial future.

Other sites: Loan Officer | 1003 The Loan Application | What not to do after you apply for a Mortgage| Pay Option Arm Calculator

While a high credit rating may give you the option of a low rate with no points, some borrowers will elect to pay points to reduce their interest rates.

Another advantage to paying any points is that it may be tax deductible. But you also must know what the break even point is ampersand how long you will be in the home otherwise it may not be worth it.

Paying points upfront on a mortgage loan will reduce your interest rate and save you thousands of dollars if you keep the loan long term.

The cost to buy down the interest rate differs at every interval. For instance, to buy down the interest rate from 6.75% to 6.50% may cost 0.5 point (one half percent of the loan amount to buy down a quarter percent in rate), and the cost to buy down from 6.50% to 6.25% may be 1 point (one percent of the loan amount to buy down the next quarter percent in interest rate). In most cases, the lower an interest rate one buys down, the higher the cost to buy the same rate interval.

Many consumers think that for every point you pay, your interest rate should go down by a full point as well. Remember that it does not work this way. Your mortgage professional can do the calculations and let you know what your savings are as well as how long it will take to recoup the costs of paying the points.

Generally you should only consider paying points if you plan on staying in your home for a good number of years. Your mortgage professional should be able to figure out if it will be in your best interest to pay points or not. Sometimes however, paying points may be necessary or required in order to meet a debt to income ratio guideline (DTI) that a lender has. An example of this would be if your debt to income ratio was 50.25% and the lenders cutoff for DTI was 50%. It may be necessary to pay a point and buy your rate down to meet the lenders guidelines here. Your mortgage professional will be able to discuss all of your options with you.

For example, if you pay one point on a $100000 loan it will cost you $1000 but it dropped your interest rate from 6.75% to 6.25%. The difference in mortgage payments would be only $32.88 which would mean it would take 2.5 years to recoup your $1000.

You will save 10 times your initial $1000 if your loan is kept for the entire length of the loan term. At 6.75% interest rate for 30 years, you would pay $233,493 over the life of the loan. However at 6.25%, you would only pay $221,656. Paying $1000 upfront, will save you $10,837 over the life of the loan.

Other sites: Loan Officer | Closing Costs | Protect Yourself from the Real Estate Bubble | Fixed-rate mortgage | The Lending Process | MIP| Pay Option Arm Calculator

There is not a one size fits all formula for selecting the “RIGHT MORTGAGE LOAN” for you and your family. There will be many factors that will come into consideration. For example:

• Your current financial picture
• How you expect your finances to change
• How long you intend to keep your house
• How comfortable you are with your mortgage payment changing

There are so many loan programs from 30 year fixed , 15 year fixed, arms, balloons, interest only, and many more. The best way for you to make the best decision will be to meet with a mortgage broker and discuss your finances, your plans and financial prospects, and your preferences.

When choosing the right loan consider that the average person lives in their home for less than seven years and has refinanced their mortgage once or twice during that seven year span.

One of the most popular loan programs of the last two years is the Payment Option ARM or Pay Option ARM Adjustable Rate Mortgage, also called the 12 Month MTA. With deferred interest rates beginning at as low as 1.00% and the ability to pay off the loan at the pace of your own choosing, these are still incredibly popular mortgage loans for investors and customers looking to purchase or refinance their home mortgage.

Often your loan program will change when your needs change. A good broker will custom the loan to fit your needs.

It is important to know your goals. Your goals regarding your finances and your goals for your property. If you can clearly express these goals to your Mortgage Professional, he can be much more helpful in assisting you to choose the right loan program.

Research any loan programs and make sure you fully understand the requirements and any special program advantages or disadvantages before you commit to the loan. Your mortgage broker should be able to offer an informed product selection that would benefit you based of an initial consultation..

When choosing the right loan program, it is important to look at the bigger picture surrounding your finances. Many consumers tend to fixate on the 30 year fixed programs because they have not been properly exposed to the numerous loan programs that are currently available to them. Factors such as length of time you plan on being in your home, your current credit situation, current debt, and income will play a large role in selecting a tailor made loan program to suit your needs.

Choosing the right loan program is just as important as the interest rate associated with a loan. The loan program that is right for you may not be right for someone else. Each borrower’s situation is different depending on many factors. These factors need to be looked at in their present state as well as with an eye toward the future. There are many programs available through mortgage brokers that a borrower may qualify but choosing the right loan for your situation is important to your lifestyle and financial well-being.

Not knowing the industry, most people will lean toward choosing a 30 year fixed rate program. But if you only intend to live in the property for 3 to 5 year before moving up or refinancing the loan you can save thousands by choosing an arm or Hybrid loan program.

The right loan program for you today might not be the right one for you in 3 years. So when discussing your needs to the broker make sure you address the future as well. Often borrowers only consider today’s needs. Think about what your loan will look like in the next 5 years.

When choosing your loan program , your first consideration should be how long you plan to stay in the home . The second is if you plan to pay off the mortgage, how quickly you want to pay it off . Other considerations may include job stability, cash flow, and future goals.

Some of the mortgages that could potentially be right for you are the option ARM, interest only fixed or adjustable rate mortgages, fully amortizing ARM’s, or the new 40 and 50 year mortgages.

If you want to move into a home with a price slightly above what you can afford now, and you expect your income to increase in the next few years, a mortgage with an “Interest Only” feature may be what you need. With an “Interest Only” mortgage, the borrower makes monthly payments for the accrued interest, none for paying down the principal. Therefore, the monthly payments are lower than that of a fully amortized mortgage. The “Interest-Only” loan allows a home buyer to purchase the house he otherwise cannot afford.

Finding the right mortgage professional should be one of the most important factors in choosing the right loan program for you. By finding a knowledgeable and trustworthy mortgage professional they can help find the perfect loan program based upon what you want, your short term needs and your long term goals.

The right program isn’t necessarily the lowest rate possible. Let your mortgage professional know exactly what your plans are with the home and they, with your help, can find the perfect loan to fit your needs.

Sometimes your monthly payment is the biggest factor in choosing a loan. For example, if your spouse is currently in college and will graduate in 2 years, you may want a payment that is lower now but may rise in 2 to 3 years. If you plan on being in your house for many years, anticipate fairly level earnings, and want to lower your monthly payment a little, you may want to move to a longer term fixed rate loan.

Frequently asked questions on collections:

Q: Can I still get a home mortgage loan with open collections showing on my credit?

A: Yes you can

Q: How do I get these collections removed from my credit?

A: Accurate negative items reported on your credit can be reported on your credit for 7 years.

Q: How come only some collections report to my credit record?

A: Each creditor, collection agent, lender, etc… can choose to report items to your credit report or not. Some will report not report to any credit repositories, some to only 1 credit repository, some will report to 2 repositories, and some will report to all 3.

Q: Do medical collections negatively affect my credit score?

A: All collections can negatively impact your credit score.

Q: I have heard paying off collections is worse than letting them be so is it better to pay off the collections or should I just leave them alone?

A: This is a very tricky situation and should be approached on a case by case situation. While you should always pay off true debts that you owe money for, sometimes it may be better to wait until after you have obtained financing for a home and sometimes you may need to pay collections off beforehand. Please consult a mortgage professional to find out what will help you most right now and to map out a financial plan.

Q: I cant afford to pay the collections off, what can I do?

A: You can call your collection companies and see if you can get them to lower the amount owed. This is very common and is highly recommended before paying off any collection. Many collection agents will bargain with you and some may even go down to 50% of the original balance. These questions are just a small sampling of some of the questions that are asked everyday by homeowners and people looking to buy their first home. Please contact your personal mortgage advisor today to find out more information about credit, collections and financial planning.

It is important to note that when you contact a collection agency and barter down a payoff amount that it will show on your credit report as “settled less than amount owed”. If an account has just gone into collections, try contacting the original creditor and paying them directly. You may be able to negotiate fees and finance charges being “removed” and then paying the debt in its entirety. Make sure you get a letter from the creditor stating the debt has been paid in full.

Not only will your mortgage advisor have answers and resources available to answer any questions, they will also have trusted relationships to recommend for your home purchase, your credit issues and your over-all financial goals.

Not all collection accounts need to be paid off. In many cases when buying a home or refinancing, the only items that need to be paid off or addressed are those items that appear on title. This is not a conforming guideline, but nonetheless is a loop-hole around having to pay them off at the time of buying or refinancing your home.

Repairing your credit, or restoring as some like to put it, is best done by a professional company. Your mortgage broker will refer you to a reputable company that can remove items like collections from your credit file. As a general rule, if it can go on your credit, it can come off too. The 7 year rule is only the maximum amount of time a derogatory can stay on your credit file.

Most subprime and Alt-A lenders will ignore open medical collections completely. Also most of these aggressive lenders will over look a certain dollar amount of collections that were opened in the last 12 months. And most collections older then 24 months will be ignored by most subprime and Alt-A lenders.

Some lenders allow all collections, judgments etc to stay open, as long as your score meets the criteria. If you have re-established credit and have a score in the upper 500′s, you can still qualify for 100% financing while having open, old collections. Contact us now to have a broker analyze your situation .

The new allowable limits for collections on your credit report is $5000. If your credit report show $5000 or less you may not have to pay them off. If it is over the $5000 then all of the collections will need to be paid. If you are receiving a non conforming/subprime loan the guidelines vary greatly and you may not have to pay any off.

It is also important to keep in mind that updating credit reports can take some time. Even if you paid all your collections today, it could still take 30-45 days before this reflected on your credit report. The most important thing is to get every interaction with your creditors in writing. If your arrangements are not in writing, they may not mean anything.

In addition to the government sponsored down payment assistance programs, there are many non-profit organizations that will grant you your down payment. You should ask your mortgage broker what program is right for you.

Commercial Financing is underwritten on a case by case basis. Every loan application is unique and evaluated on its own merits, but there are a few common criteria lenders look for in commercial loan packages. Financial Analysis A key component in making an underwriting evaluation is the debt coverage ratio (DCR). The DCR is defined as the monthly debt compared to the net monthly income of the investment property in question. Loan to Value Most commercial lenders will require a minimum of 20% of the purchase price to be paid by the buyer. The remaining 80% can be in the form of a mortgage provided by either a bank or mortgage company. Credit Worthiness For businesses less than three years old, personal credit of principals will be evaluated. This may hold true for longer periods of time for tightly held companies. For corporations, business performance and credit ratings will be evaluated with a proven track record. Property Analysis Fair Market Value and Fair Market Rent will be analyzed. Special use property may require additional underwriting. Age, appearance, local market, location, and accessibility are some other factors considered.

To calculate the debt service coverage ratio, simply divide the net operating income (NOI) by the mortgage payment(s). For the sake of simplicity, let us assume that there is only one mortgage on the property: $500,000 First Mortgage 11% Interest, 30 years amortized Annual Payment (Debt Service) = $57,139 Then: DSCR = Net Operating Income (NOI) = $65,000 Total Debt Service $57,139 DSCR = 1.14

Most lenders will have a set Debt Coverage Ratio that they will want to see when considering underwriting the project. For example, retail property lenders may want to see a 1.3 DCR and an apartment lender may want to see a DCR of 1.2 or 1.25. The riskier the project, the higher the DCR.

There are several Lenders that will fund small commercial projects, similar to residential financing. Ask your Broker or Banker about these companies.

Depending on the market value and equity which you may have in your home or any other residential properties you may already own, it may be possible for you to refinance or obtain a second mortgage or HELOC to help cover all or part of a small to medium sized commercial real estate investment.

Commercial loans are for the most part a little harder to get than a residential loan.

Because higher loan amounts are often associated with Commercial Loans, some commercial lenders may require two appraisals from different certified appraisers if the loan amount exceeds a threshold limit. Certain lenders also require the service of their own approved appraisers.

Commercial properties are those other than a single family residence, 2-family, 3-family, or 4-family home. Properties that are 5 units or more, even though all units are of residential purposes, are considered commercial properties and require commercial financing. “Mixed-use” properties, those with a commercial unit and one or more residential units on the second/third floor, are also financed with commercial loans.

Appraising a commercial property is often more costly than appraising a residence of equal size

Another name for the Debt Coverage Ratio in the context of commercial mortgages is the Debt Service Coverage or Debt Service Coverage Ratio

The most important ratio to understand when making income property loans is the debt service coverage ratio. It equals Net Operating Income (NOI) divided by Total Debt Service.