News and Press Releases

Through the years we’ve all heard about companies that claim to “fix” your credit for a fee, yet they never seem to get anything done. Some are absolute scams, some companies work half-heartedly on your behalf, and a small few actually do what they claim. We at McRae Capital Group have found (and used!) and wholeheartedly endorse an established company called The Mack Financial Group, a credit repair company. The results some of our clients have seen are amazing! In one case, a jump in their FICO score of 121 points in just 45 Days!!! Removed from profiles we’ve seen were items such as inquiries, late payments, charge offs, and collections, bankruptcies, judgments, and more. If you have bad credit or would simply like to correct a few errors on your credit reports please be sure to click on the menu link titled “FIX YOUR CREDIT FAST” for more information. We look forward to helping you save your credit and save money at the same time!

BASICS OF AN OPTION

Buyer pays the seller option money for the right to later purchase the property. This option money may be substantial or as little as $10.

Buyer and seller may agree to a purchase price now or the buyer may agree to pay market value at the time the option is exercised. It is negotiable. However, most buyers want to lock in the future purchase price upon inception of the option.

The term of the option agreement is negotiable, but the common length is generally from one year to three years.

Option money is rarely refundable.

Nobody else can buy the property during the option period.

The buyer can sell the option to somebody else.

If the buyer does not exercise the option and purchase the property at the end of the option, the option expires.

The buyer is not obligated to buy the property.

BASICS OF A LEASE OPTION

Buyer pays the seller option money for the right to later purchase the property. The lease option money is usually substantial.

Buyer and seller may agree to a purchase price now or the buyer may agree to pay market value at the time the option is exercised. It is negotiable. However, most buyers want to lock in the future purchase price upon inception of the lease option.

During the term of the lease option, the buyer agrees to lease the property from the seller for a predetermined rental amount.

The term of the lease option agreement is negotiable, but the common length is generally from one year to three years.

The option money generally does not apply toward the down payment.

A portion of the monthly rental payment typically applies toward the purchase price.

Option money is rarely refundable.

Nobody else can buy the property during the lease option period.

The buyer generally cannot assign the lease option without seller approval.

If the buyer does not exercise the lease option and purchase the property at the end of the lease option, the option expires.

The buyer is not obligated to buy the property.

BASICS OF A LEASE PURCHASE

Buyer pays the seller option money for the right to later purchase the property. This option money may be substantial.

Buyer and seller agree on a purchase price, often at or a bit higher than market value.

During the term of the option, the buyer agrees to lease the property from the seller for a predetermined rental amount.

The term of the lease purchase agreement is negotiable, but the common length is generally from one year to three years, at which time the buyer applies for bank financing and pays the seller in full.

The option money generally does not apply toward the down payment.

A portion of the monthly lease payment typically applies toward the purchase price.

Option money is nonrefundable.

Nobody else can buy the property unless the buyer defaults.

The buyer typically cannot assign the lease purchase agreement without seller approval.

Buyers are often responsible for maintaining the property and paying all expenses associated with its upkeep, including taxes and insurance.

The buyer is obligated to buy the property.

DOING A LEASE OPTION / LEASE PURCHASE

Sometimes sellers give the option money to their real estate agent as full payment of commission. Agents are not always involved in the exercise of lease options or fulfillment of lease purchase agreements and, even if you have retained real estate agent representation, you still need a real estate lawyer. Agents are not lawyers and cannot give legal advice.

In the event of a lease purchase, obtain all the disclosures and do your due diligence just like you would on a regular sale. This means:

Examine the title policy. Obtain an appraisal. Read seller disclosures. Consider obtaining pest inspections, home warranty plan and hiring other qualified inspectors.

LEASE PURCHASE BENEFITS FOR SELLERS AND BUYERS

NO BANK QUALIFYING FOR A MORTGAGE, SO BUYERS WITH BRUISED CREDIT CAN BPURCHASE A HOME, WHEN IN ANY OTHER SITUATION THEY WOULD BE UNABLE TO DO SO.

Lease purchase agreements are commonly offered by sellers in situations where mortgages are difficult to get for sub-prime borrowers or where there is a pre-payment penalty for selling outright. This method allows for that penalty time to expire.

Sellers generally get market value at today's prices and relief from paying a mortgage on a vacant property.

Although the lease payments may exceed market rent, the buyer is building a down payment and banking that the property will appreciate beyond the agreed upon purchase price.

Buyers generally make a moderate down payment, with little or no qualifying, making a lease purchase an attractive way to ease into the benefits of home ownership.

Buyers also receive a forced savings plan since part of the lease payment is credited toward the purchase price at the end of the lease option agreement.

If the buyer defaults, sellers do not refund any portion of the lease payments nor the option money and may retain the right to sue for specific performance. For more information, contact a real estate lawyer.

1.NACA-Neighborhood Assistance Corporation of America

Truly committed to helping everyone achieve home ownership, NACA provides everyone with one mortgage product, which is the best one available anywhere., NACA is unique in that we counsel everyone into this one incredible product which makes homeownership affordable. We are committed to counsel all prospective homebuyers until they succeed in purchasing an affordable home. While, it may not be immediate, if you stay with NACA, you will become a homeowner.

NACA’s counseling and underwriting criteria are “character-based” and not based on credit scores and ratios. This enables us to fulfill our mission of assisting working people who otherwise do not have access to affordable credit. Consequently, the vast majority of NACA Members are low- to moderate-income, first-time homeowners, many of whom have neither perfect credit nor substantial savings.

Helping each Member over the hurdles of the homebuying process If you are determined to purchase a home, NACA will first evaluate your particular circumstances and determine whether you are ready for homeownership and what you can realistically afford. If NACA determines that your finances are not ready to sustain a mortgage, we will assist you in planning and developing strategies to get you there. NACA provides free, personalized, and comprehensive counseling to all Members to address your particular credit and financial issues and help determine your best home purchase options. The NACA Mortgage Consultant assists you throughout the home purchase process, and once you are a homeowner, NACA will be there for as long as you have a mortgage through NACA.

NACA’s outstanding mortgage product NACA has over $10 billion in mortgage commitments for working people to purchase homes on the best terms anywhere with one mortgage product for all homebuyers The Lowest Interest Rate: one-percent below market rate for a conventional “A” credit loan with the below incredible terms: no down payment, no closing costs, no application fees, no private mortgage insurance, and no requirement for perfect credit. The NACA Program has other incredible features which are detailed under NACA Mortgage

THE CURRENT INTEREST RATE IS: 5.5%

For more information go to www.naca.com

2. ACORN HOUSING

Intimidating to nearly everyone, the homebuying process seems impossible to millions of low and moderate income Americans. ACORN Housing's mortgage counseling program eases the difficulty of buying a home for those with low incomes - they've helped over 50,000 families to achieve their dreams of homeownership since 1986. ACORN Housing Counselors make the homebuying process more accessible to first-time buyers. Instead of having to approach bankers or contend with brokers, first-time homebuyers can meet our counselors in the local ACORN Housing office to pre-qualify for a mortgage. If you have credit problems, you'll learn ways to resolve them. If you don't qualify for the program right away, you can attend our free Budget and Credit Seminar for additional help with financial management.

Through ACORN Housing, homebuyers can gain access to mortgage programs with lower interest rates, lower down payments, flexible underwriting guidelines and lower origination fees. With AHC, you can refinance for better terms through the innovative agreements we've formed with lenders.

With AHC you get:

Lower down payments and closing costs. No Private Mortage Insurance. Banks generally require 3 months of mortgage payments in the bank at settlement. With ACORN's program, they don't, which allows you to buy a home sooner. Most banks won't count public assistance or voluntarily child support in determining if you'll qualify for a mortgage. With ACORN's program, all steady income counts. Our Four Steps to Homeownership are:

Intake Appointment

One-on-One Appointment

Homebuyer Seminar

Pre-Approval For More Information go to www.acornhousing.org

Teachers and public safety personnel, who are moderate income, may qualify for $20,000 of assistance. City of Orlando employees, teachers, and public safety personnel who are purchasing homes within the city limits of Orlando do not have to be first time homebuyers. Purchasers must occupy the property as a principal residence for at least ten (10) years. The downpayment assistance becomes a grant once the period of affordability has been satisfied.

Attention All Lenders and Potential Buyers

Monies will not be available until after October 1, 2007 for Very Low and Low Income Households. Only Moderate Income households who fall within one of the targeted groups may receive assistance during Fiscal Year 2007-2008 on a first come, first serve basis. Target groups are:

Teachers Public safety personnel Future Parramore residents City of Orlando employees Effective immediately and until further notice, the City of Orlando will require a four week turn around (instead of 14 days) before a check is issued for down payment assistance. We apologize for any inconvenience.

   Click here for more information

The purpose of Orange County's Down Payment Assistance program is to provide funds to qualified first time homebuyers for down payment and closing costs associated with purchasing a home. The program will provide assistance to qualified very low, low and moderate income persons in Orange County on a first come, first ready basis. The program also requires that potential homebuyers complete a pre-purchase and post-purchase education program.

THE BUYER MUST:

»Meet the income requirements (see below for limits). Annual household income cannot exceed 120% of the area median income.

»Provide at least $1,000 of their own funds.

»Complete a home buyer's education seminar.

»Secure first mortgage financing.

The property must

»Be new or existing and located in Orange County, outside the city limits of Orlando.

»Not exceed a sales price of $219,000

»Receive competitive fixed rate financing.

»Be fee simple ownership.

The assistance

»Ranges from $20,000 to $35,000 depending on household income.

»The County's assistance is provided to the buyer's title company at closing in the form of a soft second mortgage at 0% interest which is forgiven after twenty (20) years if the home remains owner-occupied.

»In addition, the total first mortgage and Orange County's second mortgage may not exceed 105% of appraised value.

For a printable brochure regarding the program, click : Down Payment Brochure

For a printable flyer with income limits for this program, click: Income Limits

Credit in trouble? Consult: Consumer Credit Counseling Service www.cccscfl.com 407-895-8886 (option 4)

For more information about the Down Payment Assistance Program, please contact the Division's Housing Development Section at (407) 836-5174 or (407) 836-5175.

***For information on the down payment assistance available in other Florida counties, contact us with the county you are interested in and I'd be happy to look it up for you***

The Housing Development Section 701 East South Street, Orlando, Florida 32801-2891 Telephone: 407-836-5150 Fax: 407-836-5197

(The Housing Development Section is located in downtown Orlando, at the corner of South Street & Summerlin Avenue.)

Best Regards, McRae Capital Group

   Click here for more information

What is a subprime mortgage? From a lenders point of view, the best qualified customers are considered “prime”, everyone else is considered “subprime”. But what makes a prime customer to a lender? Prime customers are those people with good incomes, they don’t owe much money to anybody, their credit files are near perfect, and they have cash for down payments and closing costs. Of all the people who buy a home each year, only a very small group fall into the prime customer category.

So why do I keep seeing the subprime lenders in the news? The number of lenders who make loans to subprime customers is huge, yet only 3-4 subprime lenders get the headlines. Some of these lenders walk the fine line between making good loans and knowingly making bad loans for a quick up-front profit. And these are the problem lenders.

In the Orange County(FL) area, there are over 380 new mortgage foreclosures that will be sold at auction in the month of September! A large percentage of these people used a combination of an Adjustable Rate Mortgage (ARM) with a low teaser-rate that covers 80% of the purchase price of the home. A second home equity mortgage was also taken out, simultaneously, that covered the remaining 20% of the purchase price. This gives the buyers two loans covering 100% of the purchase price of the loan.

These double loans are quite common and work very well for many people. However, some lenders qualified the buyers on their ability to pay the mortgage loan based on the artificially low teaser rate offered for a limited time on the loan. So what has happened is that some people were able to purchase homes they couldn’t really afford.

At first the mortgage payments are manageable. Then first loan resets and the interest rate jumps up. The second home equity loan already has a high interest rate and shorter term, and now the rest of the loan payment has risen.

There just isn’t enough money to go around for long. The predictable result is that the new homeowner can’t make ends meet and begin to fall behind on the second home equity loan. The lender forecloses on the home equity loan, which automatically puts the main loan in default (payable in full) and they lose their home in the foreclosure auction. Statistically, this usually happens from eight months to 1.5 years after the last full mortgage payment was made.

Why is this newsworthy? Because these foreclosures have 100% of the home’s value mortgaged, the home is too expensive for foreclosure investors to purchase. The only person at the foreclosure auction interested in the home is the bank.

The bank now has possession of the home. They need to clean it up, insure it, maintain it, and list it with a realtor at a price high enough to recoup the original amount of the loan. If home values have dropped (as they have in most markets), then the bank has to hold on to this property until it can be sold, which could take a considerable amount of time. The lender may end up selling the home for less than the original mortgage amount and lose money home the deal.

Now, a second part of this problem that is capturing the attention of the news media is called the mortgage secondary market. Lenders have only so much money they can lend to homeowners. So what they do is sell these loans to the government and then on Wall Street (asset backed securities). The lender gets immediate cash and can make more loans. But, when a loan goes into foreclosure, the lender may be forced into a buyback situation. When this happens, they need to pay back the cash they received when they sold the mortgage.

Do this enough times and there’s not enough cash left in the bank and the lender goes bankrupt. This then becomes the national subprime lender news headlines.

So what’s going to happen? Well, some lenders will pay the price for making those overly risky loans. Some will be restricted by the government, others will go bankrupt. The end result will be that all lenders will be held accountable for making responsible loans based on the individual’s ability to repay the loan at it’s most expensive rate.

Riskier loans will be harder to get as the qualifications will be stricter. Interest rates will be higher for riskier loans. Borrowers will need to come up with cash for down payments. Cash for down payments is important as studies have shown that if someone sacrifices and saves enough money for a down payment (and it doesn’t have to be a large down payment), with their money, then they are more committed to buying and staying in their new home. It’s easy to walk away from a home and let the bank lose money. It’s not so easy to walk away from a home when you’re losing your money by doing so." Courtesy of www.gloodwinmarketplace.com Copyright 2007

Have you ever thought about how your income affects your ability to get a loan? Of course, you have to have an income to repay a loan. But have you looked at it from a lender’s viewpoint?

As a lender, you would want a couple of things from a borrower. First, you would want and income. However, income doesn’t always mean working for an hourly wage. You can be a commissioned employee or a salaried employee for example. What if you don’t work at all? Well, where does your income come from? Is it disability pension? A retirement pension? Investment income? Trust fund? And just as important, how long will you reasonable expect to receive this income.

Income is one of those flexible items in loan programs. Some programs use a “Stated” income, where you state that you make a certain amount of income. Stated incomes are usually not verified. When they are, verification can be in various forms such as your bank statements instead of a letter from an employer. Some programs (full doc) require a two year verifiable history, such as W2 forms or pay stubs. How long have you been working for your company? Time on job denotes stability. However, how long have you been with your current employer isn’t as important as it was for our parents. Our society has changed from past generations. Job hopping, once considered the mark of a vagabond, is now accepted as a part of business life. People change jobs, some frequently, not because they can’t hold a job, but because they’re trying to better themselves or benefit their families.

OK, so what else can a lender look at in the income category? Lenders prefer to see a stable or increasing earning pattern. A lender also look at how long you’ve been working in your profession. Let’s say you’re a Nurse and you’ve changed hospitals three times in the past five years. The lender will consider that you’ve been a paralegal for the preceding five years and that your income is stable or has increased.

Gaps in employment often need to be explained. Gaps happen for many different reasons, such as family leave, medical leave, etc.

Income received from child support, alimony, or a promissory note (a loan you made to another) is generally only considered as part of your income if two conditions are met. First, you must voluntary disclose child support or alimony and request they be considered as income. Second, child support or alimony (and notes) will need to continue for at least the next three to five years.

Overtime, commissions, bonus, and part-time jobs will need to have a verifiable history for the last two years and the probability of continuance for the future.

Each lender varies slightly in their income requirements for rental income, liquid asset income, self employed borrowers, corporate income (partnership and corporate income), etc.

Income from illegal sources can’t be considered when applying for a loan.

If you have any further questions or concerns, please contact us.

Courtesy of www.goodwinmarketplace.com Copyright 2007