This site is focused on Alabama Mortgages, including Alabama FHA mortgages and USDA mortgages (all states). The site includes a lot of mortgage and financial definitions that you will run into in getting an FHA mortgage or a USDA mortgage loan. If you are looking for an FHA or USDA mortgage, this USDA loan and FHA mortgage site information can answer many questions. Check out our FAQs.

Alabama Mortgage Specialists, Including Alabama FHA Mortgages and Alabama USDA Mortgages

 

USDA Loans Information

USDA loans are THE ONLY TRUE 100% MORTGAGE ON THE MARKET TODAY! Even FHA mortgages effective January 1, 2009 require a 3.5% down payment. But USDA loans do not require a down payment. The only big negatives for USDA rural development loans are 1) Only rural and small town properties qualify , and 2) There are income caps (maximum income allowed to qualify). To Check your income and area eligibility Click Here

Additional Information on Albama USDA Mortgages and Other States USDA Mortgages:

1) Land can not represent more than 30% of the total loan

2) No swimming pools

3) No monthly mortgage insurance4) No existing manufactured homes

5) Max Total Mo. Debt to Income for USDA Loans is 41% vs. FHA Loans are 43%. (Some exceptions possible)

6) 100% Refinances are also available but only for existing USDA rural development loans

7) You do not have to ba a 1st time homebuyer

8) You can purchase land and build a home with a USDA loan

9) Streamline documentation for Mid Credit Score of 620 and higher. A minimum mid credit score of 620 required.

10) For USDA loans, all household income is counted

11) Great Single mom mortgages

12) If it appears you are above the income cap but close for a USDA loan, consult a USDA mortgage broker in your area as there are some special deductions like child support for working a parent.

 

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Your Alabama USDA Loans and Alabama FHA Mortgages Specialist

Nearly All USDA Loans including Alabama USDA mortgages and FHA Mortgage Loan Lenders have now set minimum credit scores requirements of 620 or better for FHA mortgages, despite FHA not requiring a particular score. Raising your credit score will improve your chances of getting a loan as well as the rate you pay and It's not as hard as you think. Higher scores mean a Lower Interest Rate for the life of your loan.

Don't put it off any longer. Credit score requirements will only go up. There are So Many Pitfalls, you need expert advice. One lady I talked to the other day was so proud that she had been paying off some old collections. Unfortunately, I had to tell her doing so could actually LOWER HER SCORE. Sure enough, when I pulled credit her scores had dropped 30 points!

07/22/2008 - We just heard that seller funded downpayment assistance programs (the seller paid FHA 3% downpayments) are in serious trouble. Either the House is accepting the Senate termination language or will not stand in the way of HUD action terminating these programs. It is now likely seller participation in these DPA programs will be terminated soon. We will keep you apprised.

08/19/2008 - I am saddened to report that your congress and President eliminated the seller funded down payment assistance program as a part of the recent housing rescue bill effective 10/01/2008. For FHA loans, you are now required to put down 3.5% of your money or a close relative's money. Send your thank you notes to your US Senator and Congressman.

 

CHANGES TO FHA LOAN CRITERIA & REQUIREMENTS

While there is tons on information about FHA mortgages loan criteria and requirements below, I thought it would be helpful to summarize some of the recent changes instituted by both the FHA and FHA lenders.

1) Just about all lenders now require a minimum middle credit score of 620 to even be considered for an FHA loan.

2) Many FHA mortgage lenders now require at least 2 years from the filing date of a a Chapter 7 bankruptcy.

3) Judgements still need to be paid off.

4) Tax liens may not have to be paid off if you worked out a payment plan and have been making timely payments.

5) Late payments after a bankruptcy make it very difficult to get an FHA mortgage.

6) The amount of mortgage insurance you pay each month may increase depending on your credit score.

7) Many lenders will lower your Loan to Value in certain declining real estate markets.

8) It is just about impossible to find a lender who will do an FHA mortgage for a construction/perm loan. The same is true for mobile homes.

9) Seller assisted Down Payments (3% required until 01/09, then 3.5%) are no longer allowed. The FHA mortgage down payment must come from either the borrower or an Immediate relative effective 10/01/2008.

Many people don't understand how the current financial/mortgage crisis came about. It all started (and continues to this day( with the implosion of subprime mortgages. Below is a humurous but imformative video. Enjoy. (Warning: There is a small amount of foul language in the below video).

 

We also Specialize in Fixed Rate Alabama Mortgages including FHA mortgages, and USDA loans where we convert Your High Adjustable Rate Mortgage (ARMs) to a Low 30 Year Fixed Rate Alabama Mortgage Loan. Many times I can convert a 9% or 10% ARM to a Fixed Rate around 5.875%** or Less with a 97% LTV Mortgage.

 

Worried about Closing Costs? No need. Just provide your best Good Faith Estimate from another Broker or Lender and We Will Beat Their Closing Costs!*

Our Offices are in the Birmingham, AL Area

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Your USDA Loan and FHA Mortgage Loan Specialists

Below are just Some of the Alabama Mortgage Programs including FHA Mortgage Refinances, Alabama USDA Mortgages for Purchases

 

While I have strived to cover as many issues in getting a mortgage as possible, it's impossible to cover every situation. That can ONLY be done through one on one conversations, as No two situations are alike. So don't assume you can't get a mortgage until we've talked.

** Requires Mortgage Insurance. APR 6.125% 

Alabama Mortgage Loan (and Other States) - Terms

During the process of searching for your Alabama mortgage loan you will hear a lot of mortgage terms. Unfortunately, many alabama mortgage professionals don't take the time to explain these terms. Knowing their meaning can help you better understand he process. Following are definitions of a number of terms you may hear to help you:

1. Credit Score – This is the most important element when requesting an alabama home mortgage. It is the middle score of the scores reported by the three credit bureaus. If you had only two scores (one of the bureaus thought you didn't’t have sufficient credit history to report) lenders use the lower of the two. One very important fact you should know is that a credit score you pull will be different (sometimes significantly) than your score when credit is pulled by a mortgage broker or lender. This is because mortgage credit scores are arrived at through a different model than regular consumer credit. As you can imagine, the scoring model puts more weight on mortgage payment history.

2. Loan to Value or LTV and CLTV – LTV is the allowed amount of your first mortgage as a percentage of the lower of the appraised value or purchase price of the home. CLTV is the allowed total mortgages (1st and 2nd) as a percentage of the lower of the appraised value or purchase price of the home. The difference in the two is the second mortgage amount allowed.

3. Debt to Income or DTI – The percentage calculated by dividing your total monthly debt payments by your income. The housing component in this includes 1/12th of your annual homeowners insurance and property taxes. Alimony and child support count as a debt if you owe these. They count as income if you receive them. Most lenders gross up income from Social Security by 25% in these calculations. Consult your Broker but most lenders allow this ratio to be no more than 50%. There are a few at 45% and at 55%. FHA DTI ratios are 31% for the housing component (mortgage payment, insurance, taxes and mortgage insurance) and 43% for these and all other debts.

4. Mortgage Insurance or PMI (Private Mortgage Insurance) – For a traditional Prime and government Alabama home mortgage this is a monthly fee calculated from your credit score and the percentage LTV of your Alabama Mortgage Loan above 80%. Nearly all sub-prime lenders do not charge this fee. It’s essentially built into their rates. The federal government recently made mortgage insurance tax deductible. Consult your tax adviser for the particulars. One more note on Mortgage Insurance. With the implosion of the Sub prime mortgage business, many Mortgage Insurance companies are not insuring up to 100% below certain credit scores except for the government programs where credit score is not a factor.

5. Appraisal Comps or Comparables – Short for comparable sales, this is recent sales in your area of similar homes that an Appraiser uses to calculate the value of your home. A lack of comps, such as in a rural setting can cause significant difficulties in obtaining financing. Keep in mind that how much other homes are for sale for is of little or no use to an appraiser. Also, how much other homes are listed for is not a consideration.

6. Pre-Approval – An Alabama mortgage loan broker will submit your application to a lender for a “Pre-Approval”. This does NOT guarantee you a loan. All Pre-Approvals have “stipulations” or conditions that must be met. These might include things such as a) Maintaining a certain credit score until a full package is submitted, 2) LTV/CLTV maximums, 3) DTI maximum amount, 4) X number of mortgage or rent lates during the last 12 months, and 5) Verification of Employment history and pay among others.

7. Adjustable Rate Mortgage or ARM – An Alabama mortgage loan where your rate can increase or decrease set ranges at certain times based on set financial data allowing you a lower rate initially. While there can be significant risk with ARMs, you can dramatically lower this risk by a) not buying the maximum house you qualify for b) Implementing your plan for increasing your score and c) Buying, maintaining and improving your home so that it goes up in value before your initial rate period expires creating a lower LTV when you refinance.

8. Pre-payment Penalty – A fee charged by some lenders (some states regulate this) if you payoff your mortgage (refinance or sell) before a certain period. This usually comes into play with ARMs. Many Alabama Morgage loan companies do not charge pre-payment penalties but some still do. Ask to be sure. Alabama FHA programs do not have prepayment penalties.

9. Late Payments – While an Alabama mortgage loan lender may charge you a late fee after a certain “grace period” (usually 15 days) from when the payment is due as well as call you requesting payment, for credit purposes a payment does not show as late on your credit until it is 30 days past the due date. This is true of other debt, although credit card companies will hike up your rate and charge fees at the first opportunity. Remember, the 30 days late is from the due date, not the grace period date.

10. Lack of Credit or No Credit – When there is insufficient information in your credit file for the 3 bureaus to assign you a score. I have had many people brag about “not owing anyone”, thinking that this would make getting a mortgage easier. Unfortunately, it can do just the opposite, depending on whether the bureaus have enough history to assign them a score and the lender’s rules regarding open lines of credit.

11. Appraised Value vs. Purchase Price – A lender bases your loan and allowed LTV as a percentage of the sales price, even if the appraised value is higher. The only exception to this is for Alabama USDA loans which will use the Appraisal so as to cover closing costs (no cash back). Certified Appraisers estimate the value of a home based on recent (usually within the last 6 months) sales in your area. What other homes are for sale for has no weight on the appraised value. Most brokers require you to pay for the appraisal up front, even if it's a no money down deal. In some cases, you might get a little money back at closing if a seller credit for closing costs exceeds the closing costs net of the appraisal fee you paid up front as well as any Ernest money. Lenders will not allow you to receive cash back at closing just because the appraised value is higher than the purchase price. .

12. Alabama Mobile Home and Modular Home Mortgages vs. Standard Alabama Mortgage Loan Programs – While modular homes are gaining value in the eyes of lenders, most avoid mobile and modular homes like the plague. Even though a mobile home may seem like a great way to get into your own home, they’re not. This is because they don’t appreciate in value like a standard home and are much more difficult and expensive to finance. Some modular homes, if setup nicely on a foundation look just like a regular site built home. If you are considering purchasing a modular home, I would strongly suggest you look at buying a modular home that doesn't look like a standard mobile home. Remember, to most people (lenders are made up of people) perception is reality.

13. Verification of Rent or VOR – This is where an Alabama mortgage loan program requires proof from a lender as to the timeliness of your recent (usually the last 12 months) payment timeliness history. Always pay your rent on time and by check so you have cancelled checks as proof of your payment history.

14. Verification of Employment or VOE – This is simply a form to be filled out and signed by your employer as to your pay and employment history. There is also a section as to how likely your future employment is. Even after this document is submitted, most lenders will do a verbal verification the day before or of closing.

15. Income Requirement – For an Alabama Mortgage Loan, this is expressed in terms of DTI (Debt to Income) covered earlier, except for minimum disposable income cover later in this section. FHA mortgage requirements allow a max DTI of 43%.

16. Good Faith Estimate – This is one of the RESPA documents mentioned above that covers estimated closing costs and cash (hopefully zero or very little) you will need to bring to closing in the form of a certified check.

17. Collections and Charge-Offs – Alabama morgage loan lender who covers the sub prime market typically allow a certain amount (usually around $5,000) of these items shown on your credit report within the last 24 months not to include items included in a previous bankruptcy.

18. Stated Income and No Income Verification – This is where a self-employed individual can “state” (within reason for the type profession they are in) their income and not have to prove it with 2 years of tax returns. These type loans require higher scores for the same LTV as a “Full Doc” loan along with a higher interest rate. Due to the sub-prime implosion, these programs for over 90% have disappeared.

19. Income Documentation – Proof of your income. It can be a computer-generated pay-stub (within the last 30 days), W-2s, 1099s, tax returns (for self-employed) and VOE (Verification of Employment, usually rechecked the day of or before closing) or any combination.

21. Asset Verification – As covered earlier, rarely done for sub-prime loans except for funds needed to close. "A" (great credit, typically 680 and above mid score) loan lenders will verify assets. Most require reserves.

22. Seasoning – The time funds are required to have been in your bank or other account. You used to only see this in rare situations for sub-prime loans and for all Conforming loans, but now you see the requirement on most home loan purchases.

23. Credit Repair – The process of improving a person’s credit score through correction and deletion of derogatory items on the report. If you are considering using a credit repair service, be very careful. I would only use one a trusted friend had used and recommends. The key here is you can do most anything they can do yourself. To see what the government says about this Click Here

24. Primary Wage Earner – On Alabama mortgage loans involving more than one person, the primary wage earner make the most money. Their score is the primary score used to determine what loan program they qualify for, however there are some minimum requirements for the secondary wage earner such as a minimum credit score.

25. Disposable Income Requirements – A calculation of the remaining money left after deducting debt payments including the mortgage and property taxes and homeowners insurance from gross monthly income.

26. Child Support - Child support is counted just like any other debt unless the support ends in less than 10 months. The same is true for Child support Income. Child support is not grossed up. FHA mortgage requirements are that Child support be caught up or require documentation that the child support is on track to be caught up.

27. APR or Annualized Percentage Rate - This is the effective interest rate on a loan after adding in most of the closing costs. It is only a calculated rate.

28. First Payment Due Date - Normally the first payment on an Alabama Mortgage Loan is due the first of the month following the first full month after a closing. i.e.. if a loan closes the 17th of March, the first payment would be due May 1. The only exception would be if a loan closes in the first few days of a month, some lenders will give the customer the option of an "interest credit" for those days, resulting in the first payment being due the first of the following month.

29. Title Insurance - This is insurance to insure that you have a clear title to your property. While all lenders will require title insurance for their loan, most will give you this option. Take it.

30. Job Change when applying for an Alabama Mortgage Loan - While this is not really a term, you need to understand how most lenders look at job changes. In summary, a job change when you are bettering yourself is not a problem with most lenders just as long as you are in the same line of work. Most programs require you to be at your new job one full month.

31. Self-employment - Documentation for self-employed individuals usually consists of tax returns for the last 2 years and sometimes a lender will request an interim statement for the current year. One way around low income reflected on a tax return for some lenders is Bank Statement deposits. FHA loan requirements do not allow bank statements to be used as income documentation.

32. Child Support as Income - Child support is counted as income for an Alabama Mortgage Loan as long as it will continue at least 2 years, you have proof that you have been receiving it the last year or 2 (depends on the lender) and you have the divorce decree with the terms of the child support.

33. Social Security and Social Security Disability Income Calculation - Obviously, Social Security and Social Security income can be counted as income. The one thing many people don't know is that most lenders allow the income to be grossed up around 25% (depends on the program) in qualifying a home buyer for an Alabama Home Mortgage.

34. Trade Lines - This is simply a liability you are paying on regularly. Most people have a number of trade lines that don't show up on credit (rent, utilities, etc.). Most Alabama Mortgage lenders want to underwrite a loan based on trade lines that show up on credit. However, FHA loan requirements allow these alternative trades to be used in qualifying for an FHA loan.

35. Seller credit for closing costs - For Sub prime and government Alabama Mortgage loan programs, the maximum credit toward closing costs and prepaids is 6%. Many conforming programs only allow 3%. Also, some lenders will not let the sales price to be above the multi list home price in order to capture more closing costs.

36. Alabama Mobile Home Mortgage Loans - Nearly all of the few remaining lenders who will finance a mobile home require it to be permanently attached to some type of foundation (no wheels). And I don't know of anyone who will finance a single wide.

37. Disputed Items on Credit - Items on a credit report that show as in dispute still need to be documented in order for them to not count against the borrower as to credit quality and/or Debt to Income.

38. Disputing Derogatory Items on Credit to Improve Credit Score - Many people are disputing items on credit (legitimate or not) in order for the derogatory items to be taken off. If a creditor does not respond in writing to the dispute within 30 days, the derogatory item must be taken off. For old or small negative items, many creditors don't have the staff to respond to these disputes. The result is derogatory items being pulled off and credit scores jumping up, sometimes significantly.

38. Debt Consolidation Refinancing - When you refinance an Alabama Mortgage Loan in order to pay off high interest debts, most lenders require the trade line to be completely paid off. Some will even require the borrower to close the account (Mostly applies to revolving credit like credit cards).

39. Escrow Accounts – This is like a savings account that the lender holds for you with designated payments added to your regular payment. If you choose to have an escrow, it will mean you have to bring some money to closing to get these setup. Ask if you can set one up later. Most lenders will allow this so you won’t have to bring money to closing. All Alabama FHA mortgages require escrow.

Alabama Mortgage Loan - FAQs

Please Note: Most lenders are no longer using FHA loan criteria exactly as the FHA loan requirements state and they are changing daily. So some of the notes on this website may have changed by some FHA lenders if not by all.

1. Does being behind on child support affect my ability to qualify for an Alabama Mortgage Loan? - In most cases, yes particularly for government loans. FHA loan criteria specify that Child support be caught up or show it is being caught up.

2. How long after a bankruptcy before I can get an Mortgage Loan? - FHA loan criteria says you need to be discharged 2 years from a Chapter 7 however that is not the case for a Chapter 13. (Most lenders now require 2 years from he filing date of a Chapter 13) You will however need to have paid the Chapter 13 perfectly on time. You will also need to meet their trade line requirements (4 trades with 0x30 days late for the last 12 months). Trade lines can be rent, utilities, debts, phone, insurance, etc.

3. Does a seller second mortgage show up on my credit? - While theoretically possible, I have never seen this happen? Pull your own credit (all 3 bureaus) to be sure. Each bureau will let you pull your credit free once a year. Not reporting this liability is fraud.

4. What is the difference in LTV and CLTV? - These differ when you have a second mortgage. So if you received a first for 80% of the purchase price or appraised value for a refi and a second of 15% your LTV would be 80% and your CLTV would be 95%.

5. Why would a lender ask for cancelled rent checks for an FHA Loan? - This is because rent payments are the closest trade line to a mortgage and carry a lot of weight with an underwriter, particularly under FHA loan requirements.

6. What is the quickest way to raise my credit score? While there is no 'silver bullet' here, one of the best ways is to dispute old items on your report. A lender has 30 days to respond or they must take them off. With all the reductions in staff, many lenders do not have the people necessary to respond to these requests. Just remember to dispute the items with all the bureaus that are reporting them. If you are considering using a credit repair service, be very careful. I would only use one a trusted friend had used and recommends. The key here is you can do most anything they can do yourself, however I strongly recommend you at least research what to do.

7. Will paying off an old collection raise my credit score? While it can vary, in many cases it will LOWER your score. Sounds crazy but it's true. It has to do with restarting the "clock" or DLA (Date of last activity).

8. Will a lender gross up my child support for calculating my income? Unfortunately unlike Social Security, Child Support is not grossed up except for FHA loans which may allow a small gross up depending on the borrower's income situation.

9. Can I use my spouses income but not their credit score? The rule is if you use one, you must use the other. Just remember that credit score is not a determining factor for FHA, VA and USDA, although they do review credit, however many lender's FHA loan criteria are now different than the FHA's loan criteria, requiring a minimum credit score of 620. Also, I know of one lender who will use the higher credit score of a couple as long as the lowest score is at least a 540.

10. Will an Alabama Mortgage lender use an appraisal that is only 6 months old? Usually not, particularly in the current slumping housing market. You may be able to get the original appraiser to update the appraisal for a very reasonable fee. Also, lenders are putting extra scrutiny on appraisals as a result of the Sub prime melt down.

11. Does an underwriter pull credit? That varies by lender and program. Some will use the brokers credit and some will not, and therefore pull credit. Ask your broker if the lender he or she is using ill also be pulling credit. Most conforming lenders pull their own credit.

12. Can I refinance my home to pay off my Chapter 13 Bankruptcy? Yes you can. You will however, need to have sufficient equity in your home, meet the required trade line requirements, have paid the Chapter 13 on time and get the Courts permission. I AM NOT AWARE OF ANY LENDERS WHO WILL DO THIS ANY MORE.

13. What is the minimum credit score for FHA loans and USDA Loans ? FHA mortgage lenders and USDA mortgage lenders now require a middle credit score of 620 or more.

14. Does FHA loan requirements allow mobile home loans? Yes, doublewides or modulars on permanent foundations on your property. However, many Alabama FHA lenders are limiting their Alabama FHA mortgage programs for Mobile and Modular Homes, in particular refinancings. Call for what Alabama Mobile Home Mortgage Loan programs are still available.

15. My ex-husband pays me child support but there is no formal agreement. Can I count this as income? You may be able to if you can provide one of two things, either a copy of 12 months timely cancelled checks or 12 months timely bank deposits.

16. Can I use my mom's income to help qualify for my FHA Alabama Mortgage Loan? Yes, if she is willing to sign on the loan.

17. How can I get an Alabama FHA mortgage loan? You first need to find a reputable Alabama FHA mortgage broker and have them review your credit history and needs. They will take it from there. I can help you in Alabama. We are an Alabama Mortgage Broker based in Birmingham, Alabama.

18. Who makes Alabama FHA loans? There are a number of lenders who provide FHA loans. Ask your Alabama Mortgage Loan broker who is FHA approved. Call me to get pre-qualified.

19. Can I get an alabama FHA mortgage after a Chapter 7 bankruptcy? You can 2 years after your Chapter 7 was discharged. You need to have paid any debts you still have or incurred after the Chapter 7 on time (not 30 days late). Sometimes an Underwriter will make 1 or 2 exceptions with very good reasons.

20. Can I get an Alabama FHA mortgage for investment property? Unfortunately, No.

21. Can I get an Alabama FHA mortgage for 100%? At the present time, no. However, these programs allow the 3.5% down payment to come from a gift from a close relative.

22. Will being behind on my Child Support be a problem getting an Alabama Mortgage Loan? Unfortunately yes. There used to be some Sub prime lenders who overlooked this but I am not aware of any who still do.

23. Can I use a Cosigner to help me qualify for a home? Yes, under Alabama Mortgage Loan programs FHA guidelines you can. However, if the cosigner will not be living in the home the maximum LTV is 75% unless the non-occupying co borrower is a close relative. Also, a non occupying co-borrower's credit will not completely negate the primary borrower's credit quality.

24. Will I have to pay Mortgage Insurance (MI) for the life of my Alabama mortgage loan? All FHA loans require up front MI and monthly MI regardless of LTV or credit score unless the initial LTV is 78% or less.

25. Do FHA loans take longer than other a conforming Alabama mortgage loan? If they are manually underwritten, yes they will take a little longer depending on the number of exceptions that are being addressed. You can help speed up the process by gathering supporting documents as soon as possible.

26. Are Alabama VA and USDA mortgages very different from Alabama FHA mortgages? They are very similar except USDA which goes off the appraised value instead of the purchase price and will go to 100%. (See above USDA loan information.)

27. Can I refi my 100% Sub prime loan with an Alabama FHA mortgage loan? Yes, if you meet the guidelines and the value is sufficient for a 95% mortgage.

28. Will my spouse have to be on my alabama mortgage loan? No, not unless you need their income to qualify. Your spouse will however, under Alabama law be required to be on title if it is your personal residence.

29. Will I have to escrow my taxes and insurance for my alabama home mortgage? For government loans such as FHA. Yes. Under most Sub prime Alabama mortgage loan programs, no but ask your broker to check with the lender. For most Alabama conforming home mortgage loans, you will have a choice but may have to pay a fee or a slightly higher rate if you choose not to escrow.

30. Will I have to pay anything up front to an Alabama Mortgage Loan Broker? Some charge a small fee ($25 or so) to cover credit. Most will want you to pay the appraisal fee up front also. Beware of anything requested up front except these.

31. Is Mortgage Insurance required on all Alabama FHA Loans? Yes, over 78% LTV.

32. Is Mortgage Insurance tax deductible? Consult your tax advisor but I believe the law recently changed to allow MI to be tax deductible.

33. Can the seller pay for my down payment to help me with my Alabama Mortgage Loan? Unfortunately, no.

34. Can my Alabama Mortgage Loan Lender sell my loan to another Lender? Yes. Some of the paperwork you signed allows this. It is standard on all Alabama mortgage Loans as well as other states.

35. What if I have No credit? Can I get any kind of Alabama Mortgage Loan? Yes you can. A blank credit report can be a good thing as far as the government mortgage programs are concerned. What you will need is called Alternative Credit or Alternative trade lines. These are items you pay on a regular basis, preferably monthly. They include Rent, Electricity, Water, Cable, Day Care, Car insurance, etc. You will need letters from these entities documenting Zero 30 day lates in the last year. Most lenders no longer do these loans.

36. I was 28 days late on my Alabama mortgage loan and my lender charged me a late fee of 5%. Will that show up on my credit? No, just as long as your 28 days are from the initial months due date, not from the grace period date (usually the 15th).

37. Is there any mortgage insurance up front in addition to the monthly MI on an Alabama FHA mortgage? Yes, generally 1.5%, which can be built into the loan. Most lenders are also going to score based ratings where they charge up to 1% Point for low or no score.

38. What is Title Insurance? A title insurance policy provides protection against loss if a defect is found in the insured title. The Owner's Title Insurance Policy insures the owner of the property, while the Mortgagee Title Policy insures the mortgage lender.

39. My Alabama mortgage payment skyrocketed when my adjustable rate mortgage changed. I am now behind on my mortgage 30 days. Can I still get an FHA Mortgage? There's a good chance you can! A new law was recently passed to try to help people just like you qualify for an FHA Mortgage. Try not to let your mortgage go to 60 days and call an Alabama FHA Mortgage broker such as myself or one in your state ASAP! Don't wait till you get in too deep.

40. Can I get an Alabama Mortgage that includes money to fix up the home? Yes. If you qualify, you could get an FHA 203 (k) mortgage which includes rehabilitation money. There is a minimum rehabilitation amount of $5,000 and a maximum of $35,000. USDA also has good programs for this type situation.

41. Do my student loans count as debts for my mortgage? Yes, unless they are in deferment.

42. Will an FHA underwriter count my overtime to help me qualify for an Alabama FHA mortgage? Possibly. You would need to be in the job for 2 years and show some consistency in overtime pay.

43. Can I count my wife's income on an Alabama mortgage if she isn't on the loan due to previous credit problems? Unfortunately, no. You only count income for the borrowers. She will however be on title.

44. Can I get an FHA mortgage loan with a credit score under 500? Technically, yes as FHA has no score requirement, however most times when someone has a score under 500 the items causing the low score result in a turndown.

45. Will I have to pay off a Judgement and collections to get an Alabama FHA loan? Judgements, yes although they might allow you to just be making regular payments if everyone agrees. The payments would count toward your DTI. Collections, generally no.

46. My Husband declared bankruptcy recently. Will that affect me getting an FHA mortgage? No, as long as he is not on the loan. You would need to qualify with your income alone.

47. Can I get an FHA mortgage for enough money to fix up a foreclosure? Yes, FHA has a special rehabilitation program. Call me to discuss the details.

48. Is it possible to sell my note if I offer owner financing? Yes. Find a qualified private Note Buyer and sell the note at or a few months after the closing

49. How can i calculate my monthly salary? 1) If you are paid weekly, take your base weekly pay and multiply by 52 and then divide by 12. 2) If you are paid bi-weekly, take your base bi-weekly pay and multiply by 26 and then divide by 12. 3) For hourly, take your base hourly pay and multiply by your base hours a week (usually 40), then multiply by 52 and divide by 12. For twice a month (usually the 1st and 15th, take your base pay and multiply by 2. For overtime to count in your income for mortgage, you need to have had a history of OT for the last 2 years.

50. I am self-employed and need a mortgage. I have 10% down and good credit but am not reporting much taxable income. How can I get a mortgage? In the old days, you could go stated. Unfortunately, not any more, but there is a great option for you that most people don't know about. It is owner financing, even if the homeowner doesn't offer owner financing. If the homeowner doesn't have a big mortgage to payoff (you can find out at the tax office or through a realtor), you can teach the homeowner how he can create a seller held mortgage that he sells at closing. You can learn more about this option or have the seller learn more at mortgage buyer. Be both creative and determined. Don't give up.

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