Dark Magician asked:


I understand equity is value you have built up in your home by making loan payments but why is it required to refinance? Is it because lenders want to see you are in the process of paying off the loan instead of simply refinancing frequently?

Thanks

Darren

Lyn Collier asked:




There was a time when experts said that a mobile home was a bad investment. In years past, a home built on a foundation was considered to be the best place to put your money. Foundation homes, for many years, grew in value (appreciated) over time. Mobile homes go down in value (depreciate) over time. That was then. This is now. Things have changed.

Our economy is in a downward turn and is not expected to recover for awhile. Anyone who bought a house three to five years ago and tries to sell that house now will probably have to take less than they paid for it. In the past, those people could have expected to make a healthy profit. Now, they do well just to break even on the sale.

Mobile homes are gaining in popularity because for some people, it is the better alternative to renting. There are two ways to own a mobile home.

#1 Buy land and put a mobile home on it. As my dad used to say about land, “It’s a great investment. After all, they aren’t making any more of it.” That is true. Land is a non-renewable resource. That simply means, that there is a fixed amount of land, and once it’s gone, it’s gone. There is only so much land to go around, right? Because of the fact that land is a non-renewable resource, it will most likely appreciate in value over time. The house that is built on that land may not appreciate. So, the safest way to invest in real estate and do it with the least amount of investment is to buy land and then put a mobile home on it. Lenders will loan money to purchase the land and the mobile home just like they lend to people who are buying a home on a foundation. You can get one loan to pay for both land and mobile home, or you can get two separate loans. One to pay for the land and another to pay for the mobile home.

#2 Buy just the mobile home . If you can’t afford land, you can still do better than renting by purchasing a mobile home and putting it in a mobile home community or park. If you buy the mobile home, you have to have a place to put it, right? When you live in a mobile home community, you pay rent on the lot. Lot rental is usually pretty cheap. Even added to the payment on the mobile home, it is still usually way cheaper than renting a house or apartment. And, if you live there long enough, the mobile home will eventually be all yours.

You may be wondering, “What if I don’t live in it long enough to pay it off?” You can sell the mobile home even if you haven’t paid it off yet, and can sometimes make money on the sale depending on how long you have owned it. I would suggest trying to rent it out, though. That way, someone else is paying your mobile home payment for you, and you are reaping the benefits of paying down the loan.

Judy

Janine Willits asked:




Falling behind on your mortgage loan? Perhaps recent episodes of losing your job, experiencing a loss in the family, or being overcome by illnesses may have put you in a less secure financial state. If so, it is a suitable time for you to consider modifying your mortgage loan.

In the fear of being rejected, most homeowners altogether abandon the thought of applying for modification plans. However, you should be pleased to know that such plans are also beneficial to the lenders. In fact, many mortgage companies are looking into handing out mortgage modifications as these raise the possibility that they get repaid by borrowers.

Prior to approaching your mortgage company to discuss potential terms, do a rundown on your cost of living first. What is the breakdown your finances for the past 6 months? Repetitive as well new finances, which include medical bills and other necessary major purchases, should be looked into. Preparing these pieces of information can enlighten you in choosing the modification plan that is best suitable for your financial condition.

Effectively presenting your financial hardships to your mortgage company can be a tricky task. However, there are several non-profit companies to refer to for help. Such companies, usually sponsored by churches or government groups, are intended to provide you with valuable information like the correct format in presenting your case to your mortgage company. Furthermore, these non-profit may have had prior work with your mortgage company. Thus, you can gain first-hand views on the procedure adapted by your company for loan modification.

After getting your information together, it’s time for you to contact your mortgage company. You may learn that they require you to accomplish an application form. These forms may be faxed or mailed to you by the company, downloaded from the company’s website, or acquired from their local office. You must also take note of all other documents needed to verify your application.

When you have accurately and completely complied with the requirements, it could take 2 to 3 weeks for the company to go over your application. When considered, your lender may opt to decrease you interest rates, increase the time for you to pay your mortgage, or put off your outstanding payment with the new adjusted amount. These modifications can then greatly help you in coping with your financial burdens. Start working on your loan modifications now and enjoy its long-term benefits.

Tammy

Rony Walker asked:


You’ve been planning to buy a home of your own for such a long time now, but getting yourself into a home loan is the last idea on your mind. And so you wait forever until you have saved enough to buy it in cash at the same time you live terribly in your drafty apartment. The reluctance to get a home mortgage is understandable. I know how frustrating it is to be asked to pay for mortgage rates that we can hardly afford. But you also need to keep in mind that with the appropriate home mortgage lender, you both may work out what the great alternatives for you are. Home loan lending fees vary. Not all of them are expensive. You merely need to learn how and where to get them.

Before you decide to scout and search for a lender, evaluate your finances first. Know your paying capability. Deduct your regular monthly costs from your consolidated monthly household earnings and you obtain the accurate amount that you can afford for your monthly loan. When you have good credit score, you will most likely qualify for the lowest mortgage fees there is. But then, when you’re in a poor credit position, you might benefit from other choices such as a no money down home loan or a secured home equity loan. Specific lenders also give home loans for women with bad credit. It’s best to learn the available preferences for you and then search for suggestion from a professional on which option would work greatly for you.

Furthermore, it is a pretty logic to have an approximation of how much you’re going to be paying each month for a certain unit by obtaining a free mortgage quote in the Internet. Gather as much loan quotes and related information as you could. Get knowledgeable on the ins and outs of home loan lending. If you’re equipped with the correct information, you’re less likely to be conned by loan sharks who are merely out to pursue you. There are several of them around, so get me a favor and be vigilant for them. Or at least be prepared must they try to place you into their trap.

Mortgage standards vary from state to state. California mortgage lenders might process a mortgage application differently from a Florida home loan lender. Thus, skim on mortgage laws on the state where you are thinking planning to purchase your house. The federal mortgage rules might be similar, but how each state perform things can vary. This would prevent confusion and conflicts along the way.

So you’ve analyzed your finances, your credit rating has been restored, or at least you’ve studied your choices, and you discover you can afford a mortgage loan. You got yourself a mortgage quote or an estimate of how much you’ll be paying monthly and you’re well learned on the prevailing interest rates. Thirty-year mortgage charges differ from a fifteen-year mortgage charge or lower. Plus, you have read up on loan laws of the certain state you have in mind as well as the kinds of mortgage loans and you know your alternatives. Thus, I guess now you are prepared to seek for a lender. Again, be firm. This is your future you’re dealing with.



HOUSTON

Christen Scott asked:


Second Mortgage Home Loan is given on the basis of the equity of your home. First of all you must understand what is the equity of home? Equity is the value of your home minus the loans you owe. Hence, you get amount for this loan on the basis of the equity of your home. Most of the times, this loan is used to consolidate the debts of high interest rates like credit card other then this, this loan is used for home renovations, improving property, raising funds, starting a new business, or buying a new property etc.

Second Mortgage Home Loan should not be confused with mortgage refinancing because these are two different loans. Mortgage refinancing is the replacement of old loan for new one at new conditions like interest rate and duration etc. But second mortgage loan is the new loan other then the loan you already owe to the lender. You have to deposit an additional monthly installment for this loan. Therefore you must calculate before applying for this loan that whether your pocket allows or not.

There is no such rule that you have to borrow this loan from same lender rather you can get this loan at competitive rate with other lenders. Duration of this loan depends on the repayment term. If, you want to get rid of the loan early, then you must pay heavy monthly installments and small installments for long duration which may be 15 to 20 years. Interest rate for this loan may be higher than your first mortgage but it is lower than unsecured loans.



HARRY

dulvalius asked:


Me and my wife’s name are on the mortgage, when a lender checks my dept to income percent, after they run my credit and see the house payment and credit cards etc; do they allocate the full house payment in to my dept or half of it since my wife is part owner as well?

I only have a $920 a month house payment and 2 credit cards with no balance, after doing the math of 16-20% DTI it doesnt leave me a whole lot to bargain with a monthly payment for a car, I make $3200 a month. But I have also read that lenders dont want your dept to exceed 40-50% gross pay which sounds alot better to me, Im aiming for a $400-450 car monthly note.

looking at $22,000-$25,000 total loan amount for auto, 750ish credit score with 11 months for home mortgage… 2 years of one credit card and 7 months of another around $500. limits, thats my credit history .

ODELL

Loan Modification Help Center asked:


A growing recognition that the Obama Administration’s Home Affordability and Stability Program (HASP) is not working in its current design has fingers pointed all over Washington D.C. trying to place blame on mortgage servicers, investors and the administration itself. At hearings this week in Washington, comments ranged from encouraging to total frustration as expressed by Senator Jeff Merkley (D-Ore.) who said, “It’s just hard to explain to the working families in America how it is we could move so fast with extraordinarily complicated deals with the huge financial institutions, and we are moving so incredibly slowly, mired in paperwork, in rules, in talking to banks back home.”

With predictions for 3.5 million foreclosures by the end of this year and 9 million by the end of 2012, the fact that the program has initiated less than 150,000 loan modifications as it enters its fifth month has industry experts trying to figure out what went wrong and what can done to fix it. While there isn’t yet a full spectrum solution to the issue, the problems of the program have become well defined. They include:  

1)    When the program was announced in February, there was little to motivate lenders and servicers to hire staff, provide training to processors in the nuances of the program’s guidelines, and build infrastructure to support the flood of requests. While it’s true that the plan provides incentive payments to lenders and servicers, at $1,000 per year for a successful loan modification, the incentives aren’t enough to offset the costs of implementing a full scale department which, in effect, generates only losses.

2)    Executing loan modifications results in recordable losses for lenders and investors. In the Spring Congress, hearing the pleas from the mortgage industry, ended the long standing requirement that mortgages be marked to market periodically to reflect losses on the books of lenders and investors. If loan modifications were being handled quickly and efficiently the resulting losses would leave many in the industry short on capital requirements and/or struggling for survival.

3)    Investors, even with the passage of the safe harbor bill, can still stand in the way of modifications. Congress passed the bill in May to give servicers more freedom in choosing the concessions they grant in a loan modification and to protect them from lawsuits served by the investors that actually own the mortgages. The problem is that the pooling and stripping of mortgages by insurance companies, pensions and Wall Street institutions can make determining who owns what a job in itself. Even when ownership is clearly defined, servicers and their investors are trying to avoid adversarial relationships as much as possible so getting a sign off on loan modifications can either bog down the process or result in non-approval of the loan modification.

4)    The defeat of the cramdown provision in the administration’s foreclosure initiative, which would have allowed judges in bankruptcy court to decide on principle reductions, gives lenders and investors the last word on a modification. Had the provision passed, the threat of having principle balances reduced by an uninterested third party would encourage more approvals and greater concessions in loan modifications. “You have got to have some leverage, something to hold people’s feet to the fire,” said Center for Responsible Lending spokeswoman Kathleen Day. “If you tell the industry this [judge] can do the loan mod if you don’t, that is going to get their attention.” Defeated in the Senate, revisiting cramdowns is seen as a political nonstarter but other actions like the threat of the repeal of certain tax advantages could prove to be a motivator for getting loan modifications done.

5)     The program is now being criticized for being too complex and for not strongly emphasizing principal reductions. There is talk now of abandoning the original guidelines and replacing them with blanket programs intended for any one that originated a mortgage that they clearly couldn’t afford between 2005 and 2008. The simplified plan would focus on principle reductions to bring home values closer to the principle balances of the mortgages on the properties. Despite its simplification, the tentative design of that plan has its own issues as well. The first is that statistics are already showing that buyers that clearly couldn’t afford their homes have already been foreclosed. The second is that a massive round of write-downs on properties and mortgages would devastate the financial industry.

6)    The program is fighting the wrong battle. According to Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies, the original plan was well designed for the issues that started crisis but the cause behind most foreclosures has now changed. The original targets of the program including stated income, negative amortization, and other loans that buried homeowners have largely run their course while growing unemployment is now the fuel behind foreclosures occurring on prime, jumbo prime, and fixed interest loans. “The issues have changed, and in some ways the solutions haven’t kept up with the problems,” Retsinas summarized. “The most effective intervention would be to put people back to work.”

Another mistake made by the administration was the dismissal of private efforts by law firms that negotiate loan modifications on behalf of homeowners. By encouraging homeowners to take on the labor intensive and complex task of doing home loan modifications on their own the administration put thousands of people in a position where they were negotiating terms on mortgages that they didn’t understand in the first place. With untrained and overworked processors on the other end of the phone it’s no wonder many loan modifications never got off the ground.



JEREMY

Mark J asked:


A mortgage consultant is an independent agent, an intermediary between you the consumer and the mortgage lender. The mortgage consultant will shop the available lenders to find the mortgage product that offers the best combination of features, options and rates to suit your individual circumstances. The best part - depending on your credit picture - there is no charge to the consumer for the service. The mortgage consultant’s fee is normally paid by the lender.

A Mortgage Consultant put together transactions between lenders and borrowers. They have Access to many different lenders, but don’t work for them as they work for the customers. New York Mortgage Home Loan independently advises and constructs the best mortgage plan, which usually costs the customer less than if they directly go to the lender themselves.

With the New York Mortgage Home Loan the customer can get the best of both worlds - access to big bank cost of money with lower overhead and better service.

The New York Mortgage Home Loan works hard, honestly, and intelligently. They are loyal to the customer as they share the conviction that the customer should be treated as a person, not a loan number. The customer should have the same contact person, from start to finish during the entire transaction. This one-person contact is available 24 hours a day/7 days a week.

New York Mortgage Home Loan believe in being very accurate with quotes regarding interest rates and estimated closing costs - and, we take this belief one step further - we attend settlement with every one of our customers to make sure what we quoted in the beginning is what shows up at the end from the lender.

New York Mortgage Home Loan also believes it is important for the customers to understand the issues which impact the decisions that only they can make. New York Mortgage Home Loan takes the time to provide the necessary information because only a well-informed customer can make the best decisions.

New York Mortgage Home Loan understands those concepts that often aren’t understood by most mortgage originators - property tax & hazard insurance escrow accounts, investor reporting, collection activities, foreclosure law, and most importantly, the understanding of the legal instruments which all borrowers must sign at closing.

New York Mortgage Home Loan believes in honesty, hard work, and attention to every detail related to the customer and mortgage. They provide accurate Rate Quotes. The Mortgage-related closing costs at settlement are exactly same as initially quoted. New York Mortgage Home Loan ensures professional & confidential interaction with clients.

A Mortgage Consultant is useful for any of the customers as with the fluctuation in interest rates of land; homeowners have become more aggressive in seeking out the best possible terms from a lender. The appeal of a mortgage consultant lies in the opportunity for you to effectively search a large segment of the mortgage industry for the optimum terms, rather than negotiate personally with only one or a few lenders.

A mortgage consultant can also be an independent source of information and an unbiased help in wading through the myriad of options available in the mortgage industry today.



JOSEF

Minkesh Sood asked:


Home owners are in a special situation when it comes to secured loans. A home is often the major investment an individual or couple will make and that property will continue to appreciate in value over time. The longer you stay in a home, the more your home will grow in value and the more wealth you accumulate as you pay down your credit and watch your house grow more valuable.

Banks become conscious that home owners are in a powerful borrowing position. Their home is often their most valued ownership and banks have little fear that the standard home buyer will be unsuccessful to make payments putting that possession at risk. On these grounds, there are attractive secured loan options offered to homeowners using their home as guarantee.

Home:

A home is often the largest asset of a individual or couple. The financial arrangement, or mortgage, planned to purchase the home are secured by the home itself allowing lenders to offer very competitive interest rates. There are a wide range of mortgage options, but mortgages are all similar in that they use the actual property you’re purchasing as collateral.

Once you’re in possession of your home and you begin paying down the mortgage and the value of the assets increases, your equity in the property increases. A home equity loan allows you to borrow against this equity effectively creating a second mortgage or lien on the home. The funds you’ve borrowed are secured by the home meaning a default on your original mortgage or the home equity loan gives the bank the option to foreclose in order to recover their loss.

Mortgages:

The largest secured home loan is the mortgage used to purchase the home initially or as part of a refinance. There are a range of mortgage options including fixed and variable rate loans, government assisted loans and interest only loans. But all of these home loans are secured by the home itself. Very few people are in a position to pay cash for a new property. While there is satisfaction in owning a property outright, there are also benefits to leaving cash invested in other instruments and obtaining a mortgage – even if you don’t technically need to.

In many areas, the interest paid on a home loan is a huge tax deduction. By owning your home outright, you are not able to take advantage of this tremendous tax savings. By taking out a loan for the purchase of your home, you’ll effectively be paying more for the home over time, but you can counteract this by investing the cash you might have used for the home purchase in an account or instrument paying more interest than your mortgage.

If you arrange a mortgage for a new home with an interest rate of six percent, but invest the cash in a combination of instruments paying an average of seven percent over time, you’ll not only be earning a net profit of one percent on your investments, you’ll also be able to take full advantages of the tax benefits.

Home Equity :

When you have a sizeable investment in your home, you are able to access that equity in a special secured loan called a home equity loan. By borrowing a percentage of the equity you have in the home, the bank can offer you lower interest rates on the loan than other options. A home equity loan is often called a second mortgage as the home itself is used as collateral.

Funds borrowed in a home equity loan or line of credit can be used for almost any reason, but most homeowners use the funds for home improvement. Money borrowed against the home is used for additions or to upgrade the house making it more valuable. This effectively increases your equity and is an ideal situation all around.



BOOKER

Geoffery Thornton asked:


We’ve only got about one page to list these 10 tips for securing a home loan, so let’s jump right into it!

1) Get your credit score up

This is the key rule. Do not even think about getting a home loan until you’ve paid off your debts and worked your credit score up.

2) Get your credit score up

Seriously! What you should do is settle all your old debts, and then cut up all of your credit cards, but one or two. Use those for simple things like buying gas or grocery shopping and then pay them off on time.

3) Live within your means

Credit cards gave birth to a generation of people buying more than they could afford, with many of them winding up hundreds of thousands of dollars in debt as a result. Your spending money should be cash only.

4) Make sure the time is right

Sadly, we’re not all ready to own a home. If you don’t have savings and a reliable career, if you’re already in debt, you’ll want to improve your financial standing before going after home ownership.

5) Do your research

Basically, get online and do a lot of reading up on the ins and outs of home loans and the real estate market. If you develop a strong knowledge of the market, you’re more likely to get what you’re after.

6) Know what entices potential lenders

It’s more than just having a nice job and a good credit score. Remember, they do background checks. If you’ve never held a job for more than a year, that’s a turn off for lenders. Other things can help, too. If you have multiple sources of income, let the lender know about them.

7) Never borrow more than you think you can pay off

This is how American homebuyers got into so much trouble last year. They were knowingly borrowing more money than they could repay in the hope that home and land prices would forever appreciate.

Be willing to shop around

Don’t grab the first loan anyone will give you. In getting a low interest rate on a loan or mortgage, you’ll want to look around and see who can offer you the best deal. You may get lucky, but don’t count on the first bank you walk into to give you the best overall deal.

9) Don’t buy a pricier house than you need

This is more a tip for actually buying a house than it is for getting a loan, but it can help on that front, too. If you’re a bachelor, what on earth are you going to do with a two story, two and a half bathroom house? Don’t go overboard in selecting your home and the lender probably won’t feel that you’re asking for too much.

10) Don’t be afraid to ask for help

If you need a real estate agent or some expert advice on securing a home loan, then go for it. A qualified home loan professional might save you a vast sum of money.



GUS