How to Stay in Your Home Mortgage Free For a Very Long Time
February 1, 2010 by admin
Filed under Home Mortgage
It is all over the news: The president will announce some strategies to improve the Mortgage refinancing program. Unfortunately the new improvements will not improve the chances of the regular homeowner who is facing the possibility of foreclosure.
We all know the big failure of the infamous mortgage modification plan. It did not work the way it was planed. Obviously with all the requirements and requisites to be considered for loan modification it is not surprise to me that about 95% of homeowners did not get any help at all.
The Obama’s plan, even though the intentions were good, was wrongfully designed to help those homeowners’ that didn’t need any help. Now the new improvements fell very short from my not too ambitious expertise. In conclusion, nothing will change for those homeowners who really need help.
Fortunately there are some many strategies that you as a homeowner can use to delay the foreclosure process for many years. You can do this on your own, and even if you have not income at all you can expect to stay in your home for 2 or 3 years. Here are some tips:
Appropriate Hardship Letter: The hardship letter is the letter that you send to your lender in which you will try to explain your situation to either apply for a mortgage refinancing or to request for more time to get up to date on your mortgage payments.
If done properly this may get you between 3 to 6 months of extra time in your home.
Errors in the Closing Contract: This is very controversial, yet extremely effective strategy to prolong the foreclosure process for a lot more than a year. Most Housing Closing Contracts of the last 7 years contain many errors.
If you know where to look and how to proceed once you find one or more errors, this can really stop a foreclosure process in its track and place you in a commanding position against your lender. You don’t need an attorney to do this; in fact, most attorneys will try to discourage you from using this approach. This strategy doesn’t make sense for them financially.
Require a Foreclosure Hearing. If you do this the right way you can keep this fight for over a year. Remember that the idea here is not to win the Foreclosure Hearing but to delay the foreclosure process. You don’t need a lawyer to do this; you can do it on your own.
Reverse Mortgage Loans! Cash From Your Home Equity
February 1, 2010 by admin
Filed under Home Mortgage
For a senior it is important to understand the key features of the reverse mortgage loans, before he goes on, because some lenders have done false offers trying to utilize the seniors, who do not have a full understanding about the reverse mortgage loans.
If you think the differences between the usual mortgages and the reverse mortgage loans, they are many. With the usual mortgage, the borrower has to have enough monthly income compared the loan sum and he has to pay back every month. With the reverse home mortgage loans the lenders pay to borrowers and all the costs, interests and the capital will be paid back at the closing of the loans.
1. How Much Will I Get?
Actually the reverse mortgage loans amounts depend on the interest rate, the appraised value of your home and on your age. So you will get more the older you are, the lower is the interest rate and the more valuable is your home.
2. What Happens, If I Cannot Pay?
There is one good thing. All of these loans include obligatory mortgage insurances. The idea of these insurances is to guarantee two things. First, that if the selling price of your home do not cover the whole sum of costs, the insurance will pay the difference.
This means that you will never owe more than the value of your home. Second, the lender gets his money for sure. The mortgage insurance is very important, if you think a risk that you could otherwise loose your home. This special insurance guarantees, that it will never happen.
3. What Types Of Loans There Are?
These loans are divided into three groups. In the first group there are the so called single purpose loans, which only some states, governments and non profit organizations will grant. These loans are the cheapest ones. They are used for some specific purposes only, like for home improvements.
The second class is the federally insured loans, HECMs, which are backed by the HUD. These are slightly more expensive ones, but have no income or medical limitations. Owing to higher upfront costs, these loans are recommended for a longer term use. The federal counselor meeting is compulsory. The proprietary reverse mortgage loans are backed by the private companies.
4. What Are The Costs?
Usually the reverse mortgage loans offer tax free income and they have no influence on the Medicare or social security. HECM allows the borrower to live in the nursing home for 12 months before the loan must be repaid.
Normally the lenders charge the origination fees, mortgage insurance premiums and servicing fees. All these fees will be paid when the loan will be closed and the home is sold. A borrower can select either the fixed or the variable interest rate. But remember, that you as the home owner must pay taxes, insurance, utilities, fuel, maintenance and other expenses. If you do not pay taxes or insurances and do not keep the home in good condition, your reverse loan can be due and payable. When the loan is paid, you can deduct the interests in the taxation.
Home Mortgage Modification Program
February 1, 2010 by admin
Filed under Home Mortgage
Are you thinking about applying for a Home Mortgage Modification? A likely candidate for such a program would be a homeowner who has an existing mortgage (created before January 2009) who is facing financial hardship. The source of this hardship can be lost income, medical bills, or that the cost of their mortgage has increased dramatically-such as when the initial interest rate on an adjustable rate mortgage expires. Often, the home has lost value compared to the amount the borrower owes, so the loan-to-value ratio is over 80%, which means that the borrower cannot refinance through conventional means.
There are programs available through the Federal government and administered by banks and other lending institutions. The Federal program, called Making Homes Affordable, is available to homeowners who have a good payment history on an existing mortgage owned by Fannie Mae or Freddie Mac; however, many lenders provide their own programs that do not have this requirement, so you should talk to your lender and see what programs they have available. You will have to select the program that is right for you.
These programs can modify your existing mortgage in a number of ways-they can lower the interest rate on your home to as low as 2%, extend the term of your mortgage to as far as 40 years, and possibly forbear or forgive a portion of your mortgage balance so that your mortgage payment is only 31% of your monthly household income.
The specifics of the implementation of the program vary from lender to lender. These programs are designed to be implemented in two stages. The first stage is a trial period for borrowers. Once borrowers can successfully document that they are able to meet the new payment schedule, the lender can convert the trial modification to a permanent modification. The schedule for conversion from a trial period to a permanent loan modification is not spelled out, so lenders vary in how long a trial period they require.
If you are having trouble meeting your mortgage payment, the first order of business is to talk to your lender. They may have a Home Mortgage Modification in place, or they may have several programs, and you need to find the right one depending on your situation. Lenders are not in the business of owning property-they do not want to foreclose on your property, and want to accommodate you as much as they can.