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Home Loans: Finding the Best Fit in a Relaxed Mortgage Market

Posted by embracehomeloans on October 9, 2013

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By Chris Birk

It seems the Great Thaw may be upon us. Credit score requirements have loosened in recent months, a sign that at least some mortgage lenders are starting to take a softer approach after years of tight lending. Nearly a third of all successful mortgage applications in August featuredFICO scores below 700, according to mortgage technology behemoth Ellie Mae. In August 2012, only about 15 percent of green-lighted borrowers had a sub-700 score.

That surprising uptick may signal a promising shift for prospective homebuyers. But let’s not call it a comeback quite yet. Plenty of consumers with and without great credit are still struggling to secure home financing. Before you start shopping for a home, it’s important to get familiar with your credit reports and credit scores. You’re entitled to your free credit reports, as mandated by the government, once a year from each of the three credit reporting agencies. There are tools on the market that allow you to check your credit score for free. (Credit.com offers a tool like this.) The score — whether you get it for free or purchase it — may not be identical to the credit score your lender will see, but it will give you a good range to work with when you apply for a mortgage.

The bottom line is some home loans are still generally easier to obtain than others. Here’s a brief survey of the field.

Conventional Loans: Conventional home loans are “conventional” because they don’t come with a government backing and generally conform to requirements set by Fannie Mae and Freddie Mac, the biggest purchasers of home loans issued by private lenders.

Conventional loans are traditionally tougher to obtain than government-backed mortgages, and that’s still pretty much the case today. Conventional lenders are generally looking for a credit score of at least 740, which is higher than the typical minimum score required for government-backed loans. The average credit score for conventional borrowers in August was 758, according to the Ellie Mae report.

You’ll typically need a down payment of at least 5 percent to secure a conventional loan. Usually anything shy of 20 percent will require the added expense of monthly mortgage insurance, which you’ll pay until you reach a loan-to-value ratio of 80 percent. The exact amount will vary based on your down payment, your credit score and other factors, but 0.5 percent to 1 percent of the loan amount is a decent rule of thumb. Consumers with sterling credit and the assets necessary to put down 20 percent will often be hard-pressed to find a more competitive loan product than this one.

FHA Loans: The government doesn’t make home loans. Rather, it insures them. Federal backing tends to mean less stringent requirements, and that’s a big reason why loans guarantied by the government represented nearly half of all mortgages last year, as recorded by the Federal Reserve.

This loan program was created to help improve access to homeownership for lower-income buyers. FHA loans require only a 3.5 percent down payment, but they do come with both an upfront mortgage insurance premium and a monthly version, the latter of which you now pay for the life of the loan. That potentially decades-long expense is essentially the price for getting into a home today.

FHA lenders are considerably more forgiving to consumers with bruised and battered credit. Successful FHA homebuyers this August had an average 691 FICO score. The Ellie Mae report showed that applicants who failed to land an FHA loan had an average score of 667.

Previous homeowners who lost theirs to foreclosure also have a friend in FHA loans. The program recently altered its three-year “seasoning” policy to allow qualified homeowners to purchase just one year removed from a foreclosure. In comparison, some conventional borrowers may face a four- to seven-year wait.

VA Loans: The other major government-backed loan program is also booming. VA loan volume has more than tripled since 2007, and that’s in no small way because of how difficult it’s become for many veterans and service members to qualify for conventional financing. These loans don’t require a down payment or private mortgage insurance. The minimum 620 credit score most VA lenders are looking for falls into a “Fair” score range, which is a step below “Good” (and that’s a step below “Excellent”).

VA borrowers without a service-connected disability pay a funding fee on both purchase and refinance loans. The fee is typically 2.15 percent of the loan amount and helps keep the self-funded program running. It’s also a cost veterans are able to finance.

Perhaps surprisingly, in the face of all this flexibility, VA loans have had the lowest foreclosure rate out there for nearly all of the past five years. In some respects, VA loans are both the easiest and most difficult loans to land. Nine in 10 come with no down payment, and the typical VA borrower has less than $7,000 in assets.

But just becoming eligible for this program requires a level of service and sacrifice to which few Americans commit. Less than 1 percent of the population currently serves in the U.S. military.

More from Credit.com:
Why You Should Check Your Credit Before Buying a Home
How to Get Pre-Approved for a Mortgage
How Much of a Down Payment Do I Need?

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Why Real Estate Could Be the Next Hot Investment, Even Now

Posted by embracehomeloans on October 7, 2013

house model in safe box. real...

By Natalia Angulo

Following the lackluster August outlook for U.S. housing starts, it would be appropriate to ask why investors should consider putting their money into new home construction. U.S. housing starts rose less than expected amid a slowdown in the multifamily segment. While starts for multi-family homes dropped 11.1 percent to an annual rate of 263,000 units, single-family home starts went up 7 percent to 628,000 units, according to the Commerce Department.

The spike in permits for single-family homes suggested a strengthening of overall housing market, analysts say. David St. Pierre and Mitchell Schneider, co-founders of real estate private equity firm Legacy Capital Partners, or LCP1, would add the housing market is both stronger, but also the next hot investment to add to your portfolio. “Real estate is a great place to put your money,” Schneider, who is the firm’s CEO, says. “On a risk-adjusted basis, it has a relatively low risk and a relatively high yield in the spectrum of investments with an immediate return.”

Launched in 2004 in Cleveland, Ohio, LCP1 focuses on middle market real estate ventures, “deploying capital nationally” through a series of “targeted strategies.” Schneider and St. Pierre both come from real estate backgrounds. The idea behind LCP1 is twofold: to create an opportunity for individual investors to invest outside the exposure to swings in the stock market, and to provide a source of capital for those developing real estate throughout the country.

This pouring of capital into new projects could very well be the answer to spur on home sales. The drag in multifamily starts is likely the result of a surge in mortgage rates, which analysts suggest is in turn a response to a soon-expected tapering by the Federal Reserve of its $85 billion in monthly bond purchases. Cautious developers in smaller markets are the very opportunities LCP1 suggests investors get behind.

According to Movoto Real Estate’s October market report, “The steady climb in inventory continues across the country, as prices keep pace despite increased interest rates.” The report says there were 105,726 homes on the market in September, as compared to 101,086 in August, an increase of 4.6 percent. Their eye is on secondary markets, where you might not typically think to look. So the first thing they will tell you is to forget New York or Los Angeles, and instead think of places like Gainseville, Fla., and San Marcos, Texas, where they went to make their first two investments upon launching the firm.

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Embrace Home Loans is Featured on Today in America TV with Terry Bradshaw

Posted by embracehomeloans on October 7, 2013

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What do you “embrace”? We EMBRACE “Save the Bay”!

Posted by embracehomeloans on August 15, 2013

What do you “embrace”? We EMBRACE “Save the Bay”! http://ht.ly/nXTbT Kittel raised close to $1,300 for the event..
via Embrace Home Loans http://ht.ly/nXTbT

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Nearly 6 Million Borrowers Can Still Refinance: LPS

Posted by embracehomeloans on August 5, 2013

Think you missed out? No so! Nearly 6 Million Borrowers Can Still Refinance http://ht.ly/nE8NV Call Embrace now! Lock in low rates~
via Embrace Home Loans http://ht.ly/nE8NV

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It’s Still Possible to Qualify for a Mortgage Despite Bad Credit — AOL…

Posted by embracehomeloans on July 31, 2013

AOL Real Estate; “It’s Still Possible to Qualify for a Mortgage Despite Bad Credit” http://ht.ly/nvl5A Call now to learn more!
via Embrace Home Loans http://ht.ly/nvl5A

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What do you “embrace”? We Embrace HathawayPark in Freetown, MA

Posted by embracehomeloans on July 30, 2013

Charitable Giving to help improve our parks! Great job Kevin Foley!
via Embrace Home Loans https://embracehomeloans.wordpress.com/2013/07/30/what-do-you-embrace-we-embrace-hathawaypark-in-freetown-ma/

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What do you “embrace”? We Embrace HathawayPark in Freetown, MA

Posted by embracehomeloans on July 30, 2013

Embrace Home Loans Hathaway Park kevin foley

Left to Right; Kevin Foley – Embrace Home Loans Capital Markets and Richard Brown, Freetown MA Town Administrator

For many years, Hathaway Park in Freetown, MA has been home to numerous public events, including the annual 4th of July fireworks, little league baseball games, and various other town gatherings and celebrations.  However, over the last 20+ years, the park has received little financing for improvements or upkeep.  The backstop for the baseball field has rusted out and been removed, and playground equipment has been removed and not replaced as well.  The Hathaway Park Fund was founded in June 2012 by local residents Kevin Foley, Andrew Fitzgerald, and Peter Martin to channel public donations towards restoration of the park.  The fund hopes to continue raising money to provide the first upgrade to the park in a generation.



  • Kevin Foley, Capital Markets
  • www.embracehomeloans.com
  • 25 Enterprise Center
  • NewportRI02842
  • kfoley@embracehomeloans.com
  • Tel: 401.846.3100 ext.3461
  • Fax: 401.851.5507
  • Toll Free:1.800.333.3004 ext.3461

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Here we “grow again”! Embrace Home Loans has hired 16 new teammates in…

Posted by embracehomeloans on July 18, 2013

Here we “grow again”! Embrace Home Loans has hired 16 new teammates in July! http://ht.ly/n6wrx #careers #mortgage #jobs
via Embrace Home Loans http://ht.ly/n6wrx

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Here we “grow again”! Embrace Home Loans has hired 16 new teammates in July!

Posted by embracehomeloans on July 18, 2013

Please welcome the following new teammates to Embrace Home Loans

Search Now for Openings in your area! http://embracehomeloans.appone.com/

Embrace Home Loans Employees

Embrace Home Loans Employees

Newport, RI:

  • Susie Ilardi, Brian Dennehy, and Josh Del Conte – Loan Officer Development Program
  • Kevin Case – Business Intelligence Developer
  • Christine Miller – Closing Assistant (temporary)
  • Bradley Smith – Credit Assistant (temporary)

Bedminster, NJ:

  • Gaby Cifuentes – Loan Officer Assistnat

Frederick, MD:

  • Sara Myers – Loan Officer Assistant 

Louisville, KY:

  • Colleen Parker – Senior Loan Officer

Lynchburg, VA:

  • Donna Coffee – Processor

Rockville, MD:

  • Stephanie Pridgen and Jack Matheny – Loan Officer Assistants
  • Ameerah Pusey and Merinda Bonaparte – Processors

Sandy Spring, MD:

  • Laynet Ibarra – Loan Officer

Timonium, MD:

  • Kathy Cheatham – Senior Loan Officer

Company Awards & Recognitions

  • Best Small & Medium Companies to Work for In America (GPTWI) 2012, 2011, 2009, 2008, 2007, 2005, 2004
  • INC 5000 Fastest Growing Private Companies in America (Inc. Magazine): 2012, 2011, 2010, 2007
  • Best Places to Work in Rhode Island (Providence Business News): 2013, 2012, 2011, 2010, 2009, 2008, 2007, 2006
  • Business Excellence Award for Community Involvement (Providence Business News): 2006


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