Carrie Reeder asked:




Refinancing your mortgage has the potential to save you a lot of money – unless you get taken by a scam. Refinancing scams prey on your desire to refi at a low rate. Once they get you hooked by having you put money down or using delay tactics, you have little time to back out. To protect yourself from losing money on your next refinance, watch out for these signs of fraud.

1. Failure To Disclose Rates, Terms, And Closing Costs

Information is your greatest tool when making financial decisions. With online lenders you can rapidly compare rates, fees, and terms. Many lenders also offer loan estimates, disclosing pertinent information before you begin an application.

Anytime a lender delays or refuses to provide information, you should be cautious. By law, financial company have to tell you the rate, fees, and closing fees of any loan product. You should also know how much time you have to close the deal before rates are subject to reevaluation.

The most common scam involves not telling you when locked in rates run out. Then at closing, the lender will quote you a new rate a point or two higher.

2. Requests To Sign False Or Blank Loan Forms

Whenever a lender asks you to falsify information or sign blank forms, run away. If you knowingly give false information, you risk legal and financial problems. While you can still go to the authorities, you will have little recourse.

Blank forms provide frauds a license to draw up any kind of loan terms they want. You may end up with higher rates, balloon payments, or signing away your home’s title.

3. Pushes You To Agree To High Balances Or Payments

Be aware when lenders try to push you to agree to a high balance or payment. While all lenders will encourage you to borrow more in order to increase their profits, the good lenders aren’t trying to force you into foreclosure. Legitimate lenders want to collect interest. Scammers want to take your home.

The best protection from scammers is information. Check out lenders’ sites, ask questions, and don’t be afraid of backing out of a deal. Good rates and good terms are out there for those willing to do a little research.

Cindy

Anna Philips asked:




Opting for a second mortgage is a popular method for homeowners to raise additional finance. The homeowner can leverage additional equity against the property value of his or her house. Until recently, second mortgages were often frowned upon. The general public felt that a second mortgage was an indication that a person was unable to maintain his or her finances. Today, this view no longer holds true, and there are a number of financial institutions offering various schemes for second mortgages.

As the name suggests, a second mortgage is a mortgage that is secured on a property that already has a first mortgage on it. The value of the second mortgage will be calculated by subtracting the value of the first mortgage from the value of the home.

The second mortgage may be taken from a different lender as compared to the first. The money received from the second mortgage can be used for a variety of purposes ranging from funding home improvements to debt consolidation. As with the case of a first mortgage, a second mortgage is secured against the borrower’s home. This means that the borrower risks forfeiting his home in case he is unable to meet the payments of the mortgage.

There are three main types of second mortgages offered to customers. These are a traditional second mortgage, a home equity loan and a home equity line of credit. A home equity line of credit will set a maximum limit on the size of the first and second loans. This is usually between 75% and 85% of the appraised value of the owner’s property. The advantage of this type of second mortgage is that it allows you to repay the loan amount according to your own capabilities and does not enforce a strict monthly payment regime on you.

Different financial institutions offer variations of these types of mortgages. Due to the wide variety of second mortgage schemes available to the customer, interest rates for second mortgages are very attractive. Interest rates in some cases of second mortgages even fall bellow the prime lending rate. The length of a second mortgage usually begins at one year and extends to as long as 15 to 20 years. Loans of smaller amounts should ideally be repaid in shorter durations, as if stretched over long periods; the borrower would have to pay greater interest.

Mike

Jason Gluckman asked:




Special bad credit mortgages are available for teachers. Educators have access to some exclusive mortgage products that are not available to other individuals. There are several low-interest mortgages open for teachers with bad credit. These teacher-specific bad credit mortgages have several advantages that ordinary mortgages do not enjoy.

A bad credit mortgage is an affordable way to clear your bad credit. You are very often asked what your credit rate is when you apply for a mortgage or home loan. Your credit worthiness is determined after considering the credit score contained in your credit report. A credit score less than 620 is considered a bad credit. However, many loan providers do not consider bad credit a hindrance in granting you a loan. A teacher with a credit score ranking below 620 can also obtain a mortgage thanks to special bad credit mortgages. There are different mortgages available for teachers with bad credit. Teachers can find a bad credit mortgage broker or lender via the Internet.

Different bad credit mortgage lenders have different requirements. They usually lend money after determining three important factors: they view the credit, check whether the person is capable of repaying the amount, and check the assets and establish the capability to undertake stronger down payment.

Many mortgage lenders are considerate to teachers, as teaching is a safe and sound profession involving little risk. As teaching is a long-term career, a teacher is treated as a low-risk applicant. Some lenders even take the risk of not accepting any deposit from teachers. Also, teachers enjoy many advantages such as low application fees.

Lawrence

Jackie Beem asked:




What’s happened in the mortgage industry? Can you still get a new home mortgage or refinance your existing home mortgage? Why is all the news about the mortgage industry such doom and gloom?

Well, let’s take a look at all this more closely. Before the resent sub-prime fall out a buyer with a credit score of 580 and a somewhat poor credit history could get 100% conventional loan financing on a new home. The sub-prime lender was willing to take a chance on the buyer because they would be collecting a much higher interest rate on the buyer who had the lower credit rating. Often times the seller would either pay all of the closing costs or it would be rolled into their loan. Therefore, the buyer was able to move into a home with little or no money out of pocket.

A number of these buyers were only able to get approval for an adjustable rate mortgage (ARM). This meant that their rates and house payments would go up in one, two or three years, depending on the ARM program for which they had gotten approval.

The mortgage lenders would instruct these buyers to be sure and make their payments on time which would definitely improve their credit scores and then they would be able to refinance and get a better fixed rate mortgage before their ARM rate would adjust upward for the first time.

Loans for buyers in this category were considered sub-prime loans. For some lenders their total portfolio of loans was made up of sub-prime borrowers.

So what happened? The percentages didn’t work out. Not enough of these sub-prime borrowers were able to meet the commitment of their new house payments which eventually lead to foreclosure. Some of the borrowers where able to keep their payments made, but not on time. So with the late payments their credit scores did not improve as they had hoped. Therefore, they were not able to refinance before their ARM rate adjusted and their payments when up. At that point, these borrowers also went into default.

Simply too many of the sub-prime borrowers went into default for those lenders whose total portfolio was in the sub-prime market. Therefore, a number of these type lenders were forced to close their doors.

That is not to say that a large percentage of these sub-prime borrowers did not and are not currently making their payments on time and proving that they were worth the chance that the lender took on them. It is just that a large enough percentage of them did not and the lenders were forced to have too many foreclosures on their books at one time in order to still make a profit and stay in business.

As a result the bar has been raised for the buyer wishing to get a new mortgage loan today. Lenders now want a little more proof that a buyer is truly taking solid steps to rebuild their credit worthiness. Today a borrower generally needs a credit score of 620 to get a one hundred percent conventional loan on a new home purchase. In addition, their whole credit history is scrutinized more thoroughly by the lender.

This has impacted the real estate market because a pool of buyers that were once available have now reverted to renters. If sellers can’t find buyers, then they can’t become buyers themselves as they want to upgrade.

For people who have always had good credit very little has changed. Those people just need to go about business as usual. But, as we said they may have problems selling their current home because of the reduced size of the buyer pool.

For those who have previously had some credit problems and really want to buy a house you just need to take steps to improve your credit score and you too can still have a home mortgage loan.

If you are sincere, you can fairly easily improve your credit worthiness. Start by simply reviewing your credit report. There may be items on the report that have been paid but not reported properly to the credit bureaus. There may be items that are not even yours, especially if you are a Jr. or Sr. Some items may belong to your son or father that may be negatively impacting your credit score. Your credit report should not be a mystery to you.

There is a large segment of the population that falls in the borderline credit worthiness range. A lot of these buyers are still worthy of home ownership. At this point in the mortgage loan industry buyers either have to improve their credit scores
and credit history or the mortgage loan industry has to find a way to still accommodate people who have little down payment money but can still make a monthly house payment.

Sue

iceman asked:


I have solid credit, a round a 700 credit score. However my Fiance has poor credit due to some problems in college and her lack of using credit in the past few years. Her income is very good, and without it I could ever carry the mortgage we are looking for on my own. My question is how much will her credit score effect the type of rate we get or the get of line we get?

Patrick

little thing asked:


What wud help?
For me and my parther both working full time earning 36 thousand a year between us (starting off wage) both youn 21 and 23 how much wud we expect to get?

Jennifer

Josh Riverside asked:




Mortgage loans are the loans taken while purchasing a house or property. There are various kinds of mortgage loans namely, FHA (Federal Housing Administration) loans, consolidation loans, land loans, conventional loans, balloon loans and refinance mortgage loans.

Mortgage loan rates in Florida have seen a decreasing trend lately. The real estate market is booming with lower interest rates and presence of a wide range of loans offered competitively by several mortgage loan companies. Even people with bad credit records are being offered mortgage loans, albeit at a slightly higher interest rate. These kinds of loans are known as bad credit mortgage loans. They are also known as sub prime mortgages. Florida bad credit mortgage loans are for Florida citizens who have an unfavorable credit record. There are mortgage loan companies in Florida that specially offer mortgage loans for such kind of customers. They can help customers who have been denied loans from other companies as well. Now, even this has become a competitive market with several bad credit mortgage loan companies vying with each other for customers. Hence, even bad credit mortgage loans are also being offered at competitive rates. Even bad credit loans, if repaid on time, would help to improve the credit rating and clear the way for future loans at good rates. Moreover, bad credit loans can be secured or unsecured.

Bad credit mortgage loans also come with several options. The loans can be customized to suit the individual customer’s preferences. Companies are also offering mortgage loans in the form of packages. A bad credit mortgage loan company also offers assistance in repairing the past credit history by providing refinance loans or consolidation loans for previous mortgages in order to improve the credit rating. Bad credit loans are also offered to clients who have declared bankruptcy, repossession, foreclosure or divorce.

There are some basic guidelines considered while approving a candidate for a bad credit mortgage loan. They are: a FICO score of 620 or lower, two (or more) 30 day delinquencies in the past 12 months, one 60 day delinquency in the past 24 months, a foreclosure or charge-off in the past 24 months, any bankruptcy in the last 60 months, qualifying debt-to-income ratios of 50% or higher and limited ability to cover family living expenses each month.

There are several bad credit mortgage loan companies in Florida. Information about these companies can be found through websites on the Internet. Since there are so many companies, look for the company’s past history and its specialization and compare it with those of the other companies. Provide good documentation relating to past credit and income statement. A letter from the employer ensuring good conduct and job security would also be useful. Other things considered are the collateral (loan amount relative to the home value), other debts and cash reserves.

Angela

Neil Venketramen asked:




The first 5 years of your mortgage is the most critical. The general rule of thumb is that you spend at least 5 times more in principal than interest. You can run the numbers for yourself at http://www.bankrate.com
The banks’ hope you won’t break free from this cycle and have designed the mortgage tables to trap you into paying interest for a longer period of time.

To get ahead of your mortgage…
…it is important you have a basic understanding of your mortgage amortization schedule so that the banks don’t take advantage of you and suck you into a lifetime of payments.

HUH!

I know this may sound strange but nothing in life is constant.

Chances are at some point you will move, need to borrow money from your mortgage, pay for the kids education or take out a reverse mortgage in retirement. Knowing how your mortgage works will help you make those important financial decisions.

Let’s take a closer look at an example.

For a $334,000 mortgage at a 6.3% interest rate you will end up paying approximately $774,252.88 in repayments over 30 years.

You will spend $410,252.88 in interest and $334,000 in principal.

That sounds pretty fair right?

At approximately year 21, you will pay off 50% of your mortgage. So in the last ten years you will still owe $167,000.

Can you see what going on?

For the 1st 20 years you are working for the bank. Most of your hard-earned paycheck goes towards interest.

Which sucks!

Let’s take a closer look at the first 5 years of your amortization schedule. You will notice that you spend $22,068.33 in principal and $101,973.82 in interest.

Out of a total repayment of $124,042.15, you would pay approximately 82% in mortgage interest as compared to principal.

This made me feel sick when I found about this for my mortgage.

So where did it leave me and what does this mean to you?

You really start making a small dent in your mortgage after the first 8 years.

Please don’t take my word for this. You can go directly to http://www.bankrate.com and check this for yourself if your mortgage balance has changed. Pay close attention to your outstanding balance and how much of your monthly repayments are applied to interest at this point.

At the year 21 mark of your monthly mortgage payments, more of your money will go towards principal than interest. Your hard-earned paycheck would finally begin to work for you.

There are two key numbers to understand when dealing with your mortgage.


The first 5 years, where you would typically pay five times more in interest than principal, is the first key milestone.
The second key point is at year 21 when you still owe at least 50 percent of your mortgage principal.

This is interesting to know that at the 21 year mark, you pay less in interest and in the last 10 years you get very little to almost no tax deductions for your mortgage interest.

To make a dent in your mortgage, the first barrier you need to break is the five to eight year mark. Once you get past this, a little more of your cash goes towards principal and you begin to build some momentum.

Just imagine if you refinance or take out a new home.

The process starts all over again and you are stuck in a lifetime of payments.

Now here is how the banks really make their money by lending your funds to buy a home.

They count on a homeowner like you to move within the first 8 years or refinance their home. The more times you do this, the cycle starts all over again and you end paying a significant amount of your money on interest.

The goal is to break through this barrier.

Denise

Nick Adama asked:




When homeowners are attempting to put together some plan to save their homes, one of the key pieces of information they need to gather is how much they owe the bank in total. Without knowing this figure, it will be impossible to refinance the house, sell for a reasonable price and not owe anything later on, or even put together a short sale with an investor.

The best way for homeowners to get a payoff figure is to request the figure specifically from the lender or its attorneys. That will give them the most updated information on how much is currently needed to satisfy the mortgage in full and stop foreclosure. Payoff statements usually have a “good through” date of up to thirty days on them, and an estimated “per diem” interest charge for every day after the payoff expires.

In addition to requesting a payoff statement from the mortgage company, there are a few other ways for owners to get a rough idea about how much the bank is asking for, but these will not be as accurate. Out of date payoff statements, monthly mortgage balance statements, and public records searches can be useful tools to provide estimates if the lender is not being responsive to requests for updated payoffs.

Out of date payoff figures can give homeowners a very good idea of how much the bank will be looking for in the future to pay off the mortgage, but even a per diem interest charge will leave out other potential future charges. Attorneys fees may increase, or the bank may add a property tax payment of several thousand dollars to the total payoff, which may drastically increase the amount needed to stop foreclosure by paying the loan in full. If the statement is not too far out of date, though, it may be a good estimate of the current due.

Many homeowners still receive a bill every month from their mortgage company that indicates the total amount due on the loan. Usually this is just a balance of the total amount of principal left to pay off and does not include late fees, interest charges on late payments, and the attorney and court costs involved in the foreclosure process. A monthly balance statement should probably never be relied on for any actual payoff numbers, but they are useful resources for bank contact numbers which can be used to get a more accurate payoff, if nothing else.

One final way to get an estimate of the total amount owed on a mortgage is to search the public records in the county in which the property is located. Usually, the history of the mortgages/deeds of trust will be available online (or the owners or any other interested party can just call the county recorder and request the information), which will tell them when the homeowners got each mortgage and how much it was originally for. Again, this will not include changes from the time the mortgage was issued, including the charges listed in the previous paragraph and any payments the homeowners made on the loan.

Searching the title will also give homeowners, real estate agents, mortgage brokers, or potential investors a good idea if there are more liens than just the first mortgage. The bank may be willing to take less on a short sale, for example, but if the owners or investors have to come up with more money to pay property taxes, and more to pay off a second mortgage, and more to pay IRS liens, and more to pay utilities liens, then there is a strong possibility they will not end up with a very good deal that will stop foreclosure. Of course, investors could negotiate down these liens as well, but that’s more time spent dealing with lenders who may not cooperate in the end.

In any event, if the bank is still able to provide payoff statements on a mortgage, that means the homeowners are still living in the house and it has not been sold at the sheriff sale yet. The best bet for anyone interested in helping foreclosure victims or buying foreclosed houses may be simply to ask the current owners to request a payoff from their mortgage company. They can give anyone they like a copy and any parties interested in working with homeowners will have the information they need to make an offer or work on paying off the loan and ending the foreclosure.

Bernice

Legend asked:


I purchased a house for $100,000. I decide to sell it tomorrow because this time it increased in value to $110,000 overnight. No pre-payment penalties. I walk away with $10,000. What other costs can you foresee?
Other than realtor’s fees and closing costs.

Melanie