rubie00 asked:


When my house was worth something a few years ago I paid of an existing mortgage with a 30year fixed home equity loan. I also took out a small home equity loan for improvements. I had a ton of equity but now i don’t. House has been on market for 3 years since getting divorced and no offers. I have it priced well below what i owe but still cant lower it enough(don’t have enough money to pay the difference) My ex-husband lost his job so he’s unable to pay his portion on the vacant house. Can I do a deed in lieu of foreclosure on home equity loans? Is there a way to prevent oweing after foreclosure?
1) if it’s a first lien on the property by virtue of paying off the original mortgage, yes it can.
yes it is first lien

(2) Deed in lieu would be up to your lender; and you might still owe the difference between sale price and fees and what you owe.
which is why i’m giving my house back because i can’t come up with the difference of what i owe, what the house is worth and what i can sell it for. I owe 203k and its listed for 170k which after commission and fees i would need 40k to pay off loan. However, that would be that i actually got an offer. For the house to sale it needs to be listed around 159k

FELIX

Jayson asked:


The term ‘reverse mortgage loan’ is not particularly descriptive of the kind of financing involved. It implies that the homeowner is lending money to the mortgage company.

With a regular mortgage, the usual pattern works like this: the total price of a property is $100,000. Of this amount, let’s say $10,000 (10%) is put down by the prospective homeowner - the other $90,000 is supplied by a bank or other financial institution. Then, over a period of 15 to 40 years (depending on the loan term), the homeowner pays back the $90,000 in regular monthly payments including interest.

With a reverse mortgage loan, a homeowner with equity in their home or who has paid off their existing mortgage, requests a cash sum from a lending institution. The big difference from a regular mortgage is that there are no monthly payments involved. In fact, there are no payments during the homeowner’s lifetime; the total loan amount is paid back only upon the death of the homeowner. This amount will also include interest accrued over the lifetime of the loan.

There are several ways in which the homeowner can enjoy the benefits of a reverse home loan. He or she can take out a single lump sum in cash, or alternatively, a regular monthly cash advance. Another option is to use the available loan as a line of credit and use it as needed; a homeowner could also choose to combine some of the options above.

Reverse mortgage loans can be of particular help to many older Americans who may be poor in terms of available savings or monthly income, but who are wealthy in terms of the equity that has built up over the years on their real estate property. For example, if a person is retired and purchased their house 30 years ago for $10,000, they have paid off their mortgage and the house is now valued at $100,000. They could take out a reverse home loan and have access to much of that equity, with no monthly payments.

Therefore, unlike a regular mortgage, with a reverse mortgage, such things as credit score and income are not particularly relevant as there are no monthly payments involved. Obviously, these loans are generally made to senior citizens who can use the equity in their home to help finance them on a monthly basis, or perhaps to pay off their medical bills, or maybe even to travel the world.

These reverse mortgage loans are usually tax-free and are officially known as ‘Home Equity Conversion Mortgages’ or HECMs. They are backed by HUD (The Department of Housing and Urban Development). This kind of loan can also be obtained from private institutions such as banks and many other mortgage lenders, who are not backed by HUD.



HARRIS

Marcus Masters asked:


The majority of families living in the modern world devote a significant portion of their monthly income to paying a mortgage.

It is possible to save money through refinancing your mortgage, sometimes over 5-figures a year (depending on the size of the mortgage), and below you will find the top three reasons why an individual or family chooses to refinance their home mortgage.

Before I get into the three reasons, let me first say that usually the primary motivation for refinancing a home mortgage is to secure a lower interest rate. The three reasons that I want to discuss go beyond simply trying to lower the interest rate, since it kind of goes without saying that everybody wants a lower interest rate.

The first reason that people choose to refinance is to reduce or eliminate the risk of an increasing interest rate by switching from an adjustable rate mortgage to a fixed rate mortgage.

Most people sign up for an adjustable rate when they are first getting their home loan because of the tempting lower introductory rate. What they fail to take into account at this time is that a few years down the road, their rate will have adjusted to a point where it is as high as 1-2% above the normal fixed rate.

When interest rates adjust, more times then not they adjust up and not down. This can be risky, especially if the adjustment period is short, and a good way to offset or eliminate this risk is refinance to a new mortgage with a fixed interest rate.

The second reason people tend to refinance their mortgage is to get a lump-sum of cash left over. They will work with a bank or a lender to pay off their existing mortgage, then take out a new mortgage that is greater than the value to be repaid on their home. That way they are left with a certain amount of money left over, whether it is $5,000 or $100,000. The term for this is ‘cash-out refinancing.’

Cash-out refinancing can be a good idea for funding something like a large home improvement or a new car. A poential downside is that it will usually be difficult to get the same low interest rate with cash-out refinancing as you would have gotten by simply refinancing the home and nothing more.

The third reason that most people will refinance their mortgage is to switch from a subprime loan to a prime loan. The entire premise behind the subprime lending market is to provide an option for the majority of potential borrowers who do not fit the stringent qualifications for the prime loan market.

A person who agrees to a subprime mortgage usually does so without regard to the high interest rate they will have to pay, and are only concerned with getting the money for their house as soon as possible.

By switching from a subprime mortgage to a prime mortgage, you will usually be able to save 1-4% on your interest rate, and the lender will be more willing to come to agreeable repayment terms because you will be so well-qualified.



KIRK