Mortgages Home Loans – bankruptcy modification

Rebecca Sparenberg asked:




Looking to refinance your mortgage? Well stop, don’t rush; there are a few things you should consider before refinancing. With mortgage rates at an all-time low, refinancing can save you thousands of dollars. However, if you rush into a new rate without negotiate for the best deal or you don’t understanding all the details of your new mortgage you could end up losing money.

Is Refinancing Right For You?

A general rule is that refinancing becomes while if the current interest rate on your mortgage is at least two percent higher than the prevailing market rate. However, depending on your loan amount, you might choose to refinance a loan that is only one-point-five percentage points higher then the current rate.

When choosing to refinance, consider is how long you plan to stay in your house? Given the costs of the refinancing, it usually takes at least three years to fully realize the savings from a lower interest rate. Refinancing is only good idea if you intend to stay in your house long enough to make the additional fees worthwhile.

Remember To Shop Around

The most common mistake homeowners make when refinancing their mortgage is they fail to shop around. Would you buy a new car without first checking out the competitions prices?

Call two or three lenders to compare their interest rates and closing cost, then compare then to the terms offered by your current lender. Comparing offers allows you to get a better idea of what rate you may be able to qualify for. It also puts you in a better negotiating position with the lenders.

Once you receive offers, pay close attention to the interest rate, points, and closing costs. Talk with the loan officers and see if you can negotiate a better interest rate. Most often, the initial rate offered is not the best a particular lender can offer.

Consider All The Cost

There is no such thing as getting your cake and eating it too. It is important to understand that refinancing your mortgage is not free. Consumers need to ask their mortgage originator to provide all costs that will be incurred in order to complete the refinancing process in writing.
There are “no cost” rates available where all of the closing costs are built into the rate, but they usually involve higher rates. This is one of the reasons shopping around is so important.

Many lenders require that you have at least ten percent equity in your home, but there is usually at least one lender willing to underwrite loans in which the borrower has only five percent equity. Nonetheless, beware low equity loans can involve relatively high mortgage insurance costs.
In most cases, a homeowner should plan on paying an average of three to six percent of the outstanding principal in refinancing costs. One way of saving on some of these costs is to first check with your current mortgage lender, they may we willing to wave some of these fees; including the fees for the title search, surveys, and inspections.

Check Your Credit Twice

If your credit history is less than sparkling, it might be worth while to invest sometime into cleaning up your credit before you applying for a home loan. Before you apply for your new mortgage, first check your credit report for any mistakes or outdated information. It’s estimated that 60 percent of credit reports contain some type of incorrect information. Federal law allows consumers to receive a free copy of their credit bureau report each year. Review your report and make any change requests directly with the credit reporting agency.

Depending on your credit score, the process of cleaning up your credit can be as easy as reporting errors on your credit report or as complex as hiring a professional credit counselor to get your finances in order. If your credit problems cannot be fixed quickly you will almost certainly have to pay more than borrowers who have a good credit history. Yet, don’t assume that the only way to get credit is to pay a high price. Ask how your past credit history affects the price of your loan and what you would need to do to get a better price.

Don’t assume that minor credit problems or difficulties stemming from unique circumstances will limit your loan choices to only high-cost lenders. No matter what your credit score, remember the key to finding the best deal or rate is to shop, compare, and negotiate.

Jesus

Frank Collins asked:




The home loan industry has changed stated income loans requirements if you don’t know yet. Most lenders now want full documentation loans and borrowers qualifying by using traditional debt to income ratio calculations. This directly affects the high cost housing markets like California, Florida, and the tri-state area of New York, New Jersey, Connecticut as well as parts of Maryland, Virginia, and Massachusetts. The reason is a lot of homeowners in these markets used adjustable rate mortgages and qualified by using stated income, stated assets and some instances no verification of employment.

The adjustments for adjustable rate mortgages (ARMs) will continue through 2010 and into 2011. Most homeowners will be unable to refinance due to loss of equity in their home, their job, or other hardship. So, their best option is to negotiate with their loan servicing company or let the home go into foreclosure. Homeowners need to understand that when they send in a payment to the lender or loan servicer, that is their primary business to collect debts not negotiate with the public to change terms or modify interest rates. Furthermore, in a majority of the cases the borrowers do not get through to the right person or worse yet call them back in a timely fashion until they are close to foreclosure.

If a borrower has a truthful hardship and the bank is slow to react or refuses to listen what happens is a foreclosure results and the borrowers credit is hurt for seven years. When you are facing this situation and getting nowhere with a business and you don’t get the results you need in a timely manner, you should hire an attorney who specializes in foreclosures and loan modifications!

There are many stories from borrowers who say they most banks will not discuss your situation unless you are behind two to four months in payments. Once that occurs, your hard earned credit scores from years of being responsible are wiped out. Furthermore, you may never be eligible for a home loan at market rates for quite some time.

The solution is to use a loan modification company that actually does have an attorney on staff to get answers and responses quickly so your situation is resolved quickly. You end up keeping your home, getting a loan modification, reducing your interest rate to an affordable level, and in some cases reducing your loan principal but there’s no guarantees. An experienced debt representative from the attorney backed loan modification company will call you to see if you do qualify based on certain criteria.

Although, some firms will take your money even if you don’t qualify. Those are the ones you have to watch out for. They hit you when you’re down. Work with a loan modification company that has success, years of experience, paralegals and an attorney on staff. You will feel more at ease knowing you have the best team working on a solution for you whether it be a short sale, a deed in lieu of foreclosure, tax ramifications of short sale, or a loan modification.

A lawyer who specializes in negotiating with lenders can achieve magical results especially if they find RESPA or TILA violations to use for leverage. A real estate attorney understands how to speak their language and get the lender to negotiate. When a homeowners uses an Attorney, the lender’s loss mitigation and legal department become very receptive and responsive. Get a good legal team on your side to stop foreclosure and get a loan modification!

Sara

emma25 asked:


I would like to know where to located propertys that have a assumable mortgage and or the home owner cant afford it anymore.I know that FHAAND VA LOANS that closed before 1988 can be done with type of transaction without having to go through a credit check I just dont know where to find the homes/homeowners

Virginia

MONIA M asked:


Is there any law when the heirs of a home with a reverse mortgage loan don’t let the lenders know borrower died and continue to receive the monthy payments and live in the house.what is the punishment

Cheryl

Juling Gabas asked:




For most people, their biggest question when planning to calculate a mortgage is a mathematical mortgage formula . And the biggest reason for this is for these homebuyers to have an idea of what will be their monthly payments. But one thing they forget is how to qualify for a home loan. This formula can only give you a rough estimate or calculations of the basic possible monthly dues. So is the question of how much you can afford to borrow the real purpose you need a complex mathematical mortgage formula?

If you are really looking for the mathematical mortgage formula , then you need a good understanding of mathematics and equations. It is actually a complex set of equations before you can arrive at the solution. What you need is something more efficient and easy to understand for the layman. So when you are talking about mortgage formulas, you might as well use home loan calculators which are very easy to use. Most of the gadgets of calculator tables can easily be access through the internet and they are free to use.

It is not hard to find these calculators on the internet. Once you find one of these home loan calculators you can start putting your assumptions. Meaning all you need to do is trying different scenarios based o the figures you are qualified for. You can make assumptions of the interest rates and the amount of the property as well as the number of years you want to pay off the home loan. A lot of people who as many assumptions as they can to have a better idea of what is the best that will suit their budget and circumstances. It is very important to stay within what you really can afford otherwise you will find yourself in an awkward predicament if things go for the worst.

A very simple mathematical mortgage formula will require you to determine first what the current prevailing average mortgage rate is. What you can do is simply gather the lenders different rates, add all of them and the sum will be divided by the number of lenders rates. For instance, you inquired from three lenders and their rates are 3, 4, 5, add all these numbers which will be 12, then you divide it by three and comes to 4 percent. That means your average rate will be four percent. You can use your ordinary digital calculator at home especially when dealing with decimal points.

Then now you have to apply it the amount of property you are looking to purchase. For example you planning to purchase a 500,000 dollar house, this is how it will look like;
500,000 times 4 percent equals 20,000, and then you divide 20,000 by 12 months which would equal to 1,666.67 which will be your monthly payments. This is if you are doing it manually, but the best thing for you to do is to go online and search amongst the many mortgage calculators that can easily provide you with the answers.

A real mathematical mortgage formula is actually a complex type of formula and it will not be ideal for the ordinary people. It involves equations that are better left with the mathematicians. So the easiest way to do is to use mortgage calculators online which are a lot faster and easier to use. It would make your life a lot easier and will not be stress out calculating it manually. An online calculator will do the calculations for you.

Megan

Brian asked:


Is it possible to get a home equity loan or 2nd mortgage with a poor credit score. The one thing we have going for us is that our house is completely paid off. We have no credit cards and our vehicles are also paid off. The only debt we have are some medical bills that we are making payments on which is around $2500. My wife and I are both employed and make decent income of around $6000 monthly. We just have some things coming up to where we would like a loan for around $15,000. I think our credit score is around 590 . (We ran in to some difficulty when I lost my job and had a baby born with a disability and medical bills piled up). But with that much equity and such a low score would there be a loan company that would work with us? Would our local bank be able to help or should I check around on the net that specialize in bad credit loans? Any recommendations?
Thanks!
Thank you all so much for such great answers and some great explanations! Our original loan for our house was over 10 years ago so I don’t remember much about how all of that loan stuff works. We have never checked in to a equity loan so I know nothing about them except for some research on the net. I think I’ll start with my local bank and go from there. Thank you all!

Danity……I have no idea what you meant by your answer!
One more quick note. I was not working for quite some time due to a back injury that ended in surgery. I have now been back to work for a little over a year now though. My wife has been a teacher for 12 years. So, we had a 2 year span to where our credit went down the drain but the last year have been on time with what little debts we do have. I was also thinking it would be difficult to raise our credit score without having any credit out there. Maybe starting with a credit card and just using it for small purchases and paying off the balance each month would be one way. I was also thinking with the equity loan would really help rebuild our credit with timely payments. My son needs some extensive dental work and that is why we are wanting a equity loan to pay for that and other services he needs due to his disability.

Louis

BellyRubz asked:


Our house is new construction and is our first home, so we don’t have much additional money to install things like fencing and central air. Also, we got our home using alternative credit, but have been maying our mortgage payments religiously.

Yolanda

pizzagirl asked:


From applying for the loan, to actually closing the official deal. Let’s assume you find the house you want almost immediately and are only worried about the mortgage loan process and signing the final papers.

Rafael

Carrie Reeder asked:




After a bankruptcy, you can get approved for a home loan. Just be
prepared to pay several points above conventional rates. However, if you
have a large down payment or wait two years, your mortgage rates will
improve to near conventional rates.

Dealing With A Past Bankruptcy On Your Credit Report

A bankruptcy will stay on your credit report for seven to ten years.
However, it stops affecting your credit significantly after two years. So
if you have established other good credit habits, you can qualify for
market rates in no time.

But before you shrug off your bankruptcy, check your credit report to
be sure that all accounts that were part of your bankruptcy are
discharged. It’s not uncommon for paperwork to not get processed, leaving a
negative mark on your report.

Other Helpful Factors

A down payment of 20% is expected for conventional rates with a
traditional loan. Anything less and you will have to either pay a point or
more at closing or additional loan interest. The same is true with sub
prime loans. However, larger down payments decrease your rates.

Significant cash reserves and a large income can also offset your
credit risk. The amount you want to borrow is also a factor. The lower your
debt to income ratio, the better score you will get.

It’s also important to remember that not all lenders will treat your
application the same. So it’s important to shop around for the right
mortgage with the right terms.

Shopping Mortgage Lenders

If it has been less than two years after your bankruptcy or you know
you have poor credit, start shopping with a sub prime lender. They deal
primarily with people who have adverse credit. They can also offer you a
lot more options than a traditional lender.

For instance, sub prime lenders have easier terms to qualify for a zero
down mortgage. You can also opt for a future refinance with your
mortgage when your credit score improves.

Remember that you have many financing options for a mortgage, even with
a bankruptcy in your past.

Judy

Carrie Reeder asked:




There are many different home mortgage loan opportunities available to people who have credit problems. When applying for a loan, you should carefully consider the amount of the loan, interest rates, lending fees, and other terms and conditions.

Bad Credit Home Mortgage Loans

Bad credit home mortgage loans can be a valuable source of credit when you need it. However, it is very important to purchase a loan that is within your means. Just because you qualify for a large amount of money, it doesn’t mean that you should borrow that sum. Lenders often pressure their customers to borrow more, more, more. Don’t give in to this pressure. The amount of money that you borrow should be based on your finances, not someone else’s opinion.

Home Mortgage Loan Interest Rates

If you have credit problems, you may be penalized with higher rates and lending fees. This is why it is very important for people who have credit problems to shop around for the best rates. When comparing rates, you will also want to carefully consider the loan terms and any lending fees that may apply.

Home Mortgage Loan Terms

Though bad credit mortgage loans typically come with a higher interest rate, they can often be refinanced at a later date. If you think that you may want to refinance when your credit is in better shape, check into the pre-payment penalties before accepting the loan.

Most bad credit home mortgage loans carry some type of pre-payment penalty. If you have a long penalty, you may have to wait a long time before you can refinance the loan. Make sure you have a clear understanding of the amount of money and the time period involved in pre-payment.

Danny