Mortgage Loan Modification Assistance - How to Get My Loan Modified

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!

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Mortgage Interest Rates - A Look at the Last 10 Years of Refinancing

Ten years ago, prospective home-buyers and existing homeowners looking to refinance were positively giddy about the interest rates. Hovering around 8%, the rates were a refreshing change from the double-digits of the 1980s. Who could have guessed that now, in 2006, even with interest rates on the rise, we are a far cry from the "high" interest rates of the late '90s.

With the exception of a spike in 2000, the last several years have seen historically low interest rates. Under the direction of Alan Greenspan, the Federal Reserve Board lowered rates from 2001 through 2005. According to Interest Dot Com, the rate of 5.2% in June 2003 was the lowest rate recorded since their print predecessors began weekly rate surveys in 1985. These low rates enabled many Americans, who previously could not afford to do so, to buy homes. They also led many existing homeowners to refinance their mortgages and cash-out a portion of their home equity for home improvements or other goods and services. As stated by the Homeownership Alliance, the housing sector has been "a pillar of strength for the U.S. economy in recent years, limiting the depth of the 2001 recession."

This is true even with rates slowly on the rise. Since October 2005, rates have not dipped below 6% and the current rate is 6.66% for a 30 year fixed mortgage. The rates on adjustable rate mortgages are rising more slowly, thus providing an attractive option for those beginning to think about refinancing or taking out a home equity loan or line of credit.

What is the outlook for the future? Some experts say that the increases will slow, while others disagree, saying that rates will continue to rise. It seems we'll just have to wait and see.

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Mortgage Fraud

Mortgage fraud has been on a steady rise in recent times and the Financial Services Authority (FSA) is currently looking into 200 scams that were all related to the mortgage industry.

The FSA believe that the fraud goes far beyond people exaggerating about their salaries in order to get the house they want, they believe that there are organised rings within the mortgage industry that are gaining huge profits from defrauding the mortgage and property industry.

The FSA are estimating that the current losses on each new build house connected to the mortgage fraud surge stands at £45,000 per property.

It has also been determined that these mortgage fraud crimes are committed by people who are involved in other criminal activities such as drugs and people smuggling. Money laundering is another, FSA have found that there are people who have realised that by being involved in mortgage fraud allows them to hide their stolen money in property whilst also making a profit.

In an attempt to solve this problem, the FSA are introducing an authority who will be in charge of trying to tackle this increasing problem. The National Fraud Strategic Authority (NFSA) will be implementing anti-fraud activity in an attempt to stop the current trouble.

The NFSA's main plan will be to create incentives that will make it easier for the lenders and the police to enforce the law when it comes to fraud cases. The encouraging thing is that the police have shown a great interest in investigating these fraud cases in an attempt to crack down on this increase.

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Upside Down Mortgage Loan - Tips to Refinance an Upside Down Home Loan

Many homeowners are struggling as they are not able to pay their loan on time and are facing foreclosure. This is because the value of their property has declined more than 50% than what they actually bought it for. Now they owe much more money to the lenders than the actual value of the property to the lenders.

Tips to Refinance Upside Down Home Loan Refinance

If you are upside down on your mortgage and it is creating difficulty for you, then you can refinance your loan. Borrower need not to worry much about it as they still have a hope and chances to save their homes by getting their upside down mortgage loan refinanced by the related lenders.

1. You can refinance your loan by lowering interest rates which will help you to stay in your home. Some homeowners are tempted in a myth that the rates are going to be decreased further because of the bad economic scenario but it is advised that you do not take risk and wait for the situation to get worse.

2. You can be offered for a fixed rate mortgage loan by the lender to refinance your upside down home loan easily.

3. You must keep in mind objectives that will help you to figure out what type of loan you want and whether it will fulfill your financial goals.

4. You can even stay with your existing home mortgage rates. They may be reduced some fees to help you refinance in better way.

5. A professional help can be taken by an agent. You can appoint him to take care of your situation professionally and understand your circumstances to work upon it further.

6. Do not pick calls of anyone unless you approach to the loss mitigation department. You are needed to call them to know how to refinance an upside down home loan mortgage.

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Choosing the Best Subprime Mortgage Lenders

For those who have a poor credit history the dealing with any financial institute with regards to arranging a mortgage can prove very difficult. However there are now a number of subprime mortgage lenders who can provide you with a level of service that ensures that you get the best deal possible when you need to arrange a loan to purchase a house.

But with so many of these lenders now around how do you know which the best one to use is. Well to be honest the most effective way of finding a good subprime mortgage lender is to speak with a broker or to go online. Although brokers will charge a fee for helping you they will know most of the products that are on the market and will have a good working relationship with many of the lenders.

If however you would rather try and arrange a subprime mortgage yourself there are certain things that you should know about not only the lenders but also the products they offer. Below we take a look at just what some of these things are.

1. Have they included all their costs within the quote that they have provided to you. The fees that they should include along with of course the rates of interest being charged are set up, valuation and legal fees that often get charged in addition to the amount of capital that you originally borrowed. If they don't then look elsewhere to arrange your mortgage.

2. Another thing you need to be asking of any subprime mortgage lenders will you be charged should you be in a position to actually repay the loan before the term of it has expired. If you would then find exactly what sorts of charges will apply and also how long you would be locked into the mortgage before repaying it won't incur such costs.

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HCFP Mortgage Loans Program Information

Not everyone has heard about the Housing and Community Facilities Programs (HCFP) because they provide funding for many types of loans other than the conventional home loan in the city or suburb of a city. The loans they provide begin with loans for rural individuals for housing. They also provide funding for rural community facilities, apartments for low-income persons and the elderly. They provide funding for so many different types of loans including housing for farm laborers, childcare centers, nursing homes, and schools. Also, included are fire and police stations, hospitals and libraries. The HCFP is funded by the United States Department of Agriculture (USDA). The HCFP has a Loan Guarantee Program that is similar to FHA or VA loans where they are not actually doing the funding of the money. With this type of program a borrower may borrow as much as 100 percent of the appraised value of the home they want to purchase. Borrowers that qualify for this type of loan may have 115 percent of the median income for the area they live in.

The Housing and Community Facilities Programs for Individuals is for the following:
1) single family rural housing;
2) renovations and repair of a home;
3) programs that supply assistance for the disabled, low-income rural residents of multi-family housing, and the elderly.

Then there is the HCFP Direct Loan Program which makes it possible for individuals or families to qualify for a home loan at a reasonable interest rate. There are limits for the loans made under this program and they are different depending on which area you live in. Also, the borrowers using this program must be in the low income range which falls below eighty percent of the median income for their community.

There are many programs that fall under HCFP and another one is the HCFP Mutual Self-Help Housing Program. This program is to help certain people construct their own homes. These borrowers must be in the very low-income range of approximately fifty percent of the median of the area they live in. The borrowers actually perform at least sixth-five percent of the construction on not only their home but on the homes of other borrowers in the same category. Of course, there are professional builders that supervise this construction.

There are also HCFP loan for refurbishment of very low-income borrowers. These grants or loans can be repaid in a period up to two years and the interest rate is only one percent. Also, there is a program for Rural Development Real Estate for Sale which includes real estate owned by the government and fall under the category of possible foreclosures.

The HCFP and the USDA makes it possible for those people in this nation that live in the rural areas of this country to be able to provide housing for their families. Most of the citizens living in the rural areas fall within the very low-income category and they are given the opportunity to help themselves by participating in building their own homes with the help of HCFP. The HCFP even helps the poor families that have to live in multi-family dwellings that are overcrowded and in areas where they actually have to live off the land and grow their own food, etc. If they were not assisted by the HCFP they would not even be able to do that.

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Mortgage Refinancing: Home Appraisal Basics

If you are in the process of refinancing your mortgage loan, your new mortgage lender may require an appraisal prior to approving your loan. Here is what you need to know about appraisals, including tips to help maximize the equity in your home.

Your home's appraisal is a written estimate of the market value of your property. Mortgage lenders use the appraisal to determine how much of a mortgage you qualify for. When you are refinancing your mortgage, the appraisal will also determine how much equity you own in your home. If you will be borrowing against this equity, the lender will most likely require that you pay for a new appraisal prior to approving your loan.

The appraiser is a licensed professional that will do a market analysis of sale prices for similar properties in your neighborhood and evaluate the condition and amenities of your home. The appraisal will require a thorough inspection of your home inside and out.

When you are refinancing your mortgage your goal is for the appraised value to be as high as possible. There are a number of improvements you can make to your home that will improve the appraised value of your home; however, don't go overboard. New carpet and a coat of paint will go a long way to improve the appraised value. What you don't want to do is purchase top of the line appliances; these purchases rarely give you enough of a boost in your home's value to justify the expense. The best thing to do is make sure your home is up to snuff with your neighbors as far as the amenities and add-ons you invest in to improve your home's value.

When searching for a home appraiser, look for an experienced professional licensed in your area. Your realtor may be able to recommend a good one; if you are not able to find a recommendation try contacting the Appraisal Subcommittee. The ASC maintains a database you can access on their website to help you locate a licensed appraiser in your area. You can learn more about your mortgage and the appraisal of your home by registering for a free mortgage guidebook.

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How Do I Get My Insurance Check Endorsed by My Mortgage Company? An Insider's Guide

A loss to your property, to say the least, is a complicated, time consuming process. Getting that insurance check (also called a Loss Draft) is often only half the battle. If you have a mortgage, your mortgage servicing company as well as the entities that invest in your loan (such as Fannie Mae and Freddie Mac) all have a say in how, when, and if they will agree to either place their endorsement on your check, or hold your check and disburse funds to you and your contractor to begin the needed repair work.

What do you mean they can hold my check? Why is it my mortgage company's business?

When you signed the paperwork for your mortgage, there was undoubtedly a clause which required property insurance be kept in force on the property at all times, at the amounts demanded by the lender. If you don't abide, the mortgage company will purchase and charge you for lender-placed insurance.  You also agreed to report property losses to your insurance and mortgage company, and gave your lender the right to determine how, when and even if your check is released so you can repair your property. They of course will insist you repair your property rather than spend the money on other purposes.  Your insurance policy includes a loss payee, or mortgagee clause, which states how insurance proceeds which affect the dwelling and the lender's interest in the property will be paid.  Because your check will be made payable to all parties taking out the mortgage, as well as the mortgage company, the mortgage company will need to sign the check. Depending on the amount of loss you have sustained, there are several scenarios that come into play.

My loan is current and the check is for only a few thousand dollars. What now?

Typically and depending on the mortgage company, if the investor limit (the amount in which the investors in your loan determines that it will endorse and release the check).is below 10-15000 and the loan is current, the mortgage company will just sign and release the check. If your mortgage company is a bank which has branch locations, you may be able to take it to the bank. All parties to the check will have to sign, and typically the homeowner will need to be present, armed with a copy of the insurance adjustor's report or worksheet.  If there are no branch locations in your area, you will have to send the check and adjustor's report to your mortgage company (often, in reality, a company your mortgage services subcontracts with).and they will mail the check back to you. If you want the check sent back by overnight mail, you will more than likely have to provide a return overnight envelope.  Pay your contractors, and you'll be on your merry way.

I just got off the phone with my mortgage company and they said mine is a "monitored claim". What's that? Why can't I get my check signed?

When a mortgage company monitors a claim, it is because the amount of the loss, as determined by the Actual Cash Value on the adjustor's worksheet is above the limit in which the investor will sign off on the check without verifying that the work is being done to the lender's satisfaction. A mortgage company may also monitor the claim if the loan is in default. (It is amazing how many people I have dealt with whose loans are deeply into default or foreclosure who are very upset that their check won't be immediately released). In most cases, the lender will require that the check be signed and sent into them, and they in turn will send payment to the contractor(s) in thirds. A typical schedule might be 1/3 at the beginning of the claim as a down payment to the contractor, 1/3 after a 50% inspection and the final third after a 100% inspection is completed to the satisfaction of the mortgage company.  If you have the ability to be your own general contractor, you may be permitted to self-contract, but you will be have to be responsible for turning in paid receipts.  You may need the following documents from your contractor(s), some of which will be supplied by the mortgage company.

Insurance adjustor's worksheet or summary
IRS Form W-9 or a substitute provided by the lender. Your contractor fills out this form with a tax ID or Social Security number. This is so the lender can establish an account for the contractor to send checks to, and tax forms at the end of the year. A physical, not a post office box, address must be on the document.
Conditional Waiver of Lien-Neither you nor the lender wants a contractor placing a lien on your house after the work is complete, saying that they are owed more money than the original contact stated.  The Conditional Waiver of Lien normally must match the amount on the contract that the contractor has with you as the homeowner
Signed contract between you and the contractor.  Again, the contract amount must match the conditional waiver of lien.
Certificate of Completion. Some mortgage companies require a form signed by all homeowners stating that the work is completed to the homeowners' satisfaction.

When do I get my first check?

If all the forms are filled out correctly, the Is are dotted and the Ts are crossed, once the lender verifies the contractor is who he or she says they are, you may receive a check, made out to yourself, any co-borrowers, and the contractor within about two weeks.  In my experience, it is best to check in with your lender's Loss Draft department by phone every two days.  Your contractor will only be able to receive information from the lender if you authorize it in writing, so bear that in mind if you want the contractor to oversee the claim.and make inspection requests.

My contractor demands more that a third down? What do I do? 

Depending on the mortgage company and the status of your loan, your lender may have a procedure in place to have management review situations like this as an "exception". The better shape your loan is in, the better your chances of getting it approved. 

I've done everything they asked, and I can't get my checks.

Loss Draft departments are very much overworked, and it may just take persistence from the beginning to end of the process. Don't just assume that if you sent or faxed documents in that they have them, they all were correct and money will be on its way. Leave nothing to chance!  ALWAYS follow up!

What if I have a first and second mortgage?

Usually the first mortgage holder will demand that all other parties sign off on the check before it is submitted to the first mortgagee. Occasionally a second mortgagee may require documents from the first mortgagee stating that the first mortgagee will be monitoring the claim.

There are a lot of variables and situations that I can't cover here, but it is my hope that should the unfortunate occur, you'll be at least one step ahead of the game and be on the way to having your repairs completed and back into your home just a little more quickly.

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Removal of a 2nd Mortgage Through Chapter 13 Bankruptcy

Chapter 13 Bankruptcy offers an important, and often unknown, option to consumers who have residential real estate mortgages. Namely, removing a junior lien holder or "2nd" from your debt. Since the value of real estate has decreased, a common complaint I hear is, "I cannot believe I am paying more than my house is actually worth."

If you purchased a home in the past three to four years and financed with 80/20 mortgages, or if you refinanced your home and took out a second mortgage, chances are you can completely remove that second mortgage and other junior liens from your home.

Imagine...file a chapter 13 Bankruptcy to eliminate all your credit card debt, reduce your car payments, cure the back payments on your first mortgage and now, entirely remove your second mortgage.

In addition, if your house value bounces back, that equity is yours to keep.

It is important to realize that the removal of a 2nd mortgage is available in a Chapter 13 bankruptcy only. The ideal candidate for this process has a 2nd mortgage on a home that is no longer appraised at or above the amount of the 1st mortgage. It is necessary to obtain comps for the property and an appraisal to establish your the fair market value of the home.

If the fair market value works, a motion to get court approval will need to be filed. The mortgage company may oppose this motion. This will then require an evidentiary hearing and perhaps an adversary complaint. If the court decides that the fair market value of the home is below what is owed on the first mortgage, the second mortgage is "stripped" from the home and the debt associated with the second mortgage is made an unsecured debt (essentially being treated like credit card debt). Typically, in a Chapter 13 bankruptcy, a small percentage of the unsecured debt is paid, if at all.

Once the motion is approved, you will need to make all plan payments (over a 3 to 5 year period) and obtain your discharge. Once the debts are discharged, the second mortgage is completely gone.

Under existing Bankruptcy laws, debtors are not able to force a first mortgage to modify the terms of the mortgage on loans for their primary residence. Many lenders who realize the alarming state of the economy are willing to negotiate a modification of their mortgage, allowing a debtor to lower their monthly payments. This is a relatively recent change for many lenders who had previously refused to accommodate such requests. Such a modification may drastically help a homeowner who wants to keep their home but who is suffering from a reduction in income and home value. This benefit is even more evident when used in conjunction with the removal of a second mortgage for debtors who have both a first and second mortgage.

Further, recent legislation was introduced in Congress in the first week of 2009 that would now allow Bankruptcy judges in Chapter 13 cases to modify first mortgages by:

-reducing the amount of the secured claim (i.e. lowering the balance on the mortgage/deed of trust that is secured by the home);
-changing the interest rate of the loan or modifying the adjustable feature of certain loans; and/or
-changing the term of the loan.

This bill, if enacted, would finally provide some relief to homeowners. In the past, the mortgage lenders have vehemently opposed such a change. However, this time may be different. News reports indicate Citigroup has already suggested that it would support this legislation with some minor revisions, one of which is to require that a homeowner first attempt to modify the loan directly with the lender(s) before the loan can be modified by a Bankruptcy judge.

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Monopoly and Mortgage: Playing the Game

Remember monopoly? Remember mortgages? You know, the text that's written when you flip your title deed. Flipping the title deed means your property is on mortgage and you'll get money from the bank.

Sounds simple right? Wrong. There's much more to it than that.

Here are the things you need to know about the game and how to get most out of your mortgages.

The idea of the game is to buy and rent and sell properties so profitably that one becomes the wealthiest player and eventual "monopolist". Starting from "go" move tokens around the board according to the throw of dice.

When a player's token lands on a space not yet owned, he may buy it from the bank: otherwise it is auctioned off to the highest bidder.

The purpose of owning property is to collect rents from opponents landing there. Rentals are greatly increased if you put houses (those little green ones) and hotels (those dreaded red infrastructures).

So your best bet in winning the game is to put the most houses or hotels in your lots. (That's assuming you don't land in your opponents' lots with houses or hotels).

To raise more money, lots may be mortgaged to the bank. Here comes the tricky part. That includes deciding which lots to mortgage and how you can get the most out of your mortgaged property.

Mortgages in monopoly can be done only through the bank. The mortgage value is printed on each title deed. The rate of interest is 10 percent, payable when the mortgage is lifted. If any property is transferred which is mortgaged, the new owner may lift the mortgage at once if he wishes, but must pay 10 percent interest.

If he fails to lift the mortgage he still pays 10 percent interest and if he lifts the mortgage later on he pays an additional 10 per cent interest as well as the main value.

Houses or hotels cannot be mortgaged. All buildings on the lot must be sold back to the bank before any property can be mortgaged. The bank will pay one-half of what was paid for them.

In order to rebuild a house on mortgaged property the owner must pay the bank the amount of the mortgage, plus the 10 percent interest charge and buy the house back from the bank at its full price.

When you mortgage a property, you can use the money for anything you want to, so long as it's legal under the rules of monopoly. The only restriction in this regard is that a player cannot pre-mortgage a property to finance its own purchase.

For example, say a player wants to purchase Boardwalk but can't do it with his or her current assets. That player cannot say, "I'm going to buy Boardwalk by mortgaging it, and then using the money I get for the mortgage to complete the purchase." You must own a property before you can mortgage it.

Playing the game is fun and it will give you an idea of how it is in the real buy and sell world. There are also the Community Chest and Chance spaces which players land on. Instructions ranging from winning $25 dollars to $500 dollars are given. Sometimes players even land in jail! This game is definitely a clever and amusing entertainment.

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Top Ten Mortgage Companies

It is not very easy to top the list of the best mortgage companies in the country. You have to have the best service, a large network, and the infrastructure to maintain that kind of a reputation. The best top 10 mortgage companies according to the Forbes list are all giants in terms of mortgage. They have operations in many countries in the world. Let us take a look at some of them.

Citigroup

These guys top the Forbes list for the best top 10 mortgage companies. The company started in America and now has operations in 54 countries outside the U.S. Most of these are countries that have never used mortgage as a financing option. The annual revenue is estimated to be $108 billion.

The Bank of America

America's leading bank, it started to offer mortgage services and small loans and has now become a leader in credit cards as well. The Bank of America ranks second in the "best top 10 mortgage companies" in the Forbes List.

Wells Fargo

One of America's leading mortgage providers, they have an amazing network with more than 1000 branches across the country. Their revenue was estimated to be $33 million.

Wachovia´s

They are ranked fourth in the best top 10 mortgage companies. Since they have taken over the Western Financial Bank, they have increased their chances considerably to go higher up in the rating.

There are many other organizations as well--like BB&T, Golden West Financial, Popular, and M&T--who also are not quite far behind in the Forbes list of best top 10 mortgage companies.

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Mortgage Cycling: Advantages and Disadvantages

Mortgage cycling has recently been marketed as a unique way to pay off your mortgage early and build up equity at the same time. The basic premise behind mortgage recycling however, has actually been used before. The main idea is that you make additional payments to reduce the mortgage principal and therefore pay off the loan early. The mortgage principal is the amount you owe, interest payments are calculated according to the amount of this outstanding loan.

Advantages

1. By reducing the amount of your mortgage principal you will significantly reduce the amount of future interest. This is especially significant since if a mortgage was to last 40 years most of the payments in the early years are mainly interest, you do little to reduce the principal.

2. To make it easier to meet the 6 monthly down payments mortgage cycling uses the technique of also taking out a home loan. This is just a standard load guaranteed against the value of your house. The interest rate should be low because it is secured against the value of your house. A careful use of this extra loan enables you to make large lump sums towards paying off your mortgage

Disadvantages

1. It is risky. To take an extra home loan means that if you unexpectedly lose your job and can't meet your repayments your house may be at risk.

2. The advantages of paying off a mortgage early are overestimated. True you may have less to pay when you are 50 but for most people there greatest period of financial difficulty is the first years of a mortgage.

3. Suppose your current monthly mortgage is $1000 this is a lot, and nobody wants to be paying that for 30 years. However in 30 years inflation will reduce the real value of your mortgage payment. Assuming real wages rise (as they have done in the past) it will be only a small % of your income in the future. Also many people find that in the early period of buying a mortgage they may have more bills like education for their kids, old student loans e.t.c.

4. Personally I would like a mortgage that lasts as long as possible, so I can have more money now. But everyone is different, if you are in the lucky position of having much spare cash at the end of every month then Mortgage cycling may well be worth doing.

5. There are less risky flexible mortgages which don't require the taking out of extra home loans..

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1st and 2nd Mortgage Refinance Loan - Why Refinance Both Mortgages?

The hassle of making two monthly mortgage payments has prompted many homeowners to consider refinancing their 1st and 2nd mortgages into one loan. While combining both loans into one mortgage is convenient, and may save you money, homeowners should carefully weigh the risks and advantages before choosing to refinance their mortgages.

Benefits Associated with Combining 1st and 2nd Mortgages

Aside from consolidating your mortgages and making one monthly payment, a mortgage consolidation may lower your monthly payments to mortgage lenders. If you acquired your 1st or 2nd mortgage before home loan rates began to decline, you are likely paying an interest rate that is at least two points above current market rates. If so, a refinancing will greatly benefit you. By refinancing both mortgages with a low interest rate, you may save hundreds on your monthly mortgage payment.

Furthermore, if you accepted a 1st and 2nd mortgage with an adjustable mortgage rate, refinancing both loans at a fixed rate may benefit you in the long run. Even if your current rates are low, these rates are not guaranteed to remain low. As market trends fluctuated, your adjustable rate mortgages are free to rise. Higher mortgage rates will cause your mortgage payment to climb considerably. Refinancing both mortgages with a fixed rate will ensure that your mortgage remains predictable.

Disadvantages to Refinancing 1st and 2nd Mortgage

Before choosing to refinance your mortgages, it is imperative to consider the drawbacks of combining both mortgages. To begin, refinancing a mortgage involves the same procedures as applying for the initial mortgage. Thus, you are required to pay closing costs and fees. In this case, refinancing is best for those who plan to live in their homes for a long time.

If your credit score has dropped considerably within recent years, lenders may not approve you for a low rate refinancing. By refinancing and consolidating both mortgages, be prepared to pay a higher interest rate. Before accepting an offer, carefully compare the savings.

Moreover, refinancing your two mortgages may result in you paying private mortgage insurance (PMI). PMI is required for home loans with less than 20% equity. To avoid paying private mortgage insurance, homeowners may consider refinancing both mortgages separately, as opposed to consolidating both mortgage loans.

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5 Year Fixed Rate Mortgage Rates

5 year fixed rate mortgage is a mortgage loan where the interest rate on the note remains the same through the term of the loan, as different to loans where the interest rate may change. Other forms of mortgage loans include interest only mortgage, graduated payment mortgage, changeable rate including changeable rate mortgages and tracker mortgages, negative paying off mortgage, and balloon payment mortgage.

Remember that each of the loan categories above except for a direct changeable rate mortgage can have a period of the loan for which a fixed rate may apply.

A Balloon Payment mortgage, for example, can have a fixed rate for the term of the loan followed by the ending balloon payment. Terminology may differ from country to country: loans for which the rate is fixed for less than the life of the loan may be called hybrid changeable rate mortgages.

This payment amount is independent of the additional costs on a home some periods handled in escrow, such as property taxes and property insurance. Therefore, payments made by the lender may change more than period with the adjusting escrow amount, but the payments handling the principal and interest on the loan will remain the same. There are different categories of commercial mortgage is a loan made using real estate as guarantee to secure repayment. Such as 5 year fixed rate mortgage.

A commercial mortgage is related to a residential mortgage, except the guarantee is a commercial building or other business real estate, not residential property. In addition, commercial mortgages are normally taken on by businesses instead of personal lenders.

The lender may be a partnership, incorporated business, or limited company, so assessment of the creditworthiness of the business can be more complicated than is the case with residential mortgages. In 5 year fixed rate mortgage no recourse, that is, that in the event of default in repayment, the borrower can only seize the guarantee, but has no further claim against the lender for any remaining shortage.

The common reason for this is twofold many laws extensively avoid the borrower from going after the lender for any shortage, and mortgages structured for sale as bonds give a higher priority to always receiving some sort of income and therefore require a sentence which permits the lender to take the property instantly, regardless of bankruptcy proceedings that the lender might be going through.

The 5 year fixed rate Mortgage in the in the globe, require the lender to simply make a monthly payment small sufficient to pay off the loan more than a 10 year period, need a balloon payment a total sum after a lesser period.

The lender most likely wills effort at that period to refinance the loan or sell the property. Thus there are two elements usually to the term of a commercial mortgage loan, the length of period allowed until balloon payment known merely as the term, and the paying off.

The length of the loan can vary from a matter of days to 10 years. If a loan had a 10 year paying off schedule, but a 5 year term it would commonly be referred to as a 5 year balloon with a 5 year payment schedule.

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Find the Best Mortgage Refinance Companies

There are very many mortgage refinance companies in the world today. You can choose from private companies or public companies. You will find that one type of such companies will have the backing up of a bank. Financial institutions have also been known to be joining the mortgage refinancing sector. You might be having a problem when finding such companies.

The process to get one of the good mortgage refinance companies is illustrated below. Research would be the first step. Of the companies that are in your area, find out which of them have had the least number of disagreements with their clients.

A company that has had very few disagreements is a company that one can trust. It means that they are serious about their business and they give their clients satisfaction. You can also check their duration in the business. Due to the high level of cons that have been happening all over, it would be prudent to choose a company that has been in business for several years at least.

This will give you security when you are dealing with them. It also means that they have been in the business long enough to able to know the pros and cons of the business. The mortgage refinance companies that have been in the business for long have a higher chance of having the best interest rates in the market.

Alternatively you can inquire from close relatives and friends on which mortgage refinance companies they have used. Having had first hand experience with a company, a relative or a friend can be able to direct you on the do's and don'ts of mortgage refinancing.

They can be able to tell you of their experience with certain companies this can help you in saving time that one would use to physically find out for themselves the history of a certain company. They may also warn you on companies that they have had a bad experience with. Another method that one can find a mortgage company is through the internet.

There are very many online mortgage companies that can be found on the internet. From these sites you will be able to find which companies will work best for you. You can contact them and inquire with a few questions before you make up your mind. Online refinance companies are easier to research as they are on the internet and in a few hours you will have gotten one that suits you.

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BOA Mortgage Modification - 3 Things to Avoid For Success

Getting a Bank of America / BOA mortgage modification loan is not as difficult as the majority of people think. In fact, if you go about the process correctly, you are almost assured of approval. Many people get it wrong however and I am going to reveal the 3 pitfalls to avoid in this short article. Avoid these and you'll be in the clear.

Pitfall 1 - Poorly Drafted Hardship Letter
One of the main causes of failure when people go for a boa mortgage modification loan is failing to sufficiently craft a winning hardship letter. The hardship letter is important because it outlines your present circumstances as well as any steps you've taken to remedy your situation. It also gives the lender an opportunity to adequately asses your 'need' for the loan.

Pitfall 2 - Failure to Understand Debt/Income Ratio Requirements
Before you are considered for a modification loan the lender will assess your needs against what is called the debt/income ratio. This guideline stipulates that your monthly mortgage payments must exceed 31% of your gross monthly income. If you fall below this threshold, you are unlikely to be considered for a loan. Many people fail to work this out correctly and get rejected.

Pitfall 3 - Poor Finance Management
This is a big one and many people fail to get it right terribly. You see, if you are not able to meet the new modified loan commitment, you are unlikely to get approved. It should be obvious but many people work on everything else except this. Before you go for a boa mortgage modification loan, take the time to get rid of any monthly payments that are not necessary. Cut back on your expenses as best as you can. The lender will go through your financial situation with a fine tooth comb and any discrepancy or hint that you may not be able to pay will result in rejection.

So in summary, the 3 pitfalls above are the three main reasons for denial of a modification loan, but now that you have a firm grasp of them, you should have no problems. In fact, my parting recommendation is that you avoid any risk of denial all together and seek professional help. These professionals speak your lender's language and have the necessary experience to get your loan modification approved. There are plenty loan modification companies online that will handle your Bank of America loan modification application for you.

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Was Your Mortgage Declined in Underwriting - Common Reasons For Loan Denial

Nothing is more frustrating then receiving word you have a declined mortgage refinance loan. Not being able to secure financing can make all the plans that you had seem to go right down the drain. But knowing the common reasons for loan denial can go a long way in helping to stop the potential problem before it starts.

Why Home Loans Are Declined

Home loans are declined because the underwriters at the lenders have decided your loan either did not fit into their lending guidelines or you were to risky a borrower. The underwriters act as a wall of protection for the lender so if something does not make sense to them they may either ask for clarification or deny the loan.

Common Reason For Loan Denial

One of the most common reasons mortgages get turned down is from borrowers giving false or inaccurate information. Many times this is done by accident. Even when done by mistake it is hard for underwriters to look past false information as it appears to look like potential fraud.

Wrong income levels are often stated on loan applications. The best way to avoid this is to go by last years income on your W-2. If you have had a raise and are hourly figure 40 hours a week as your base salary. Wrong income is the quickest way to get your loan terminated in underwriting.

Property values are another common reason mortgages get turned down in underwriting. People may tell their loan officer their home is worth a certain amount only to find out it is worth much less then they thought This is especially true today with the recent drop in real estate values in many parts of the country.

A credit score drop is also another common reason for losing your loan. One of the biggest mistakes people can make is to have multiple mortgage companies pulling their credit. While a few credit pulls will not hurt you having more then 4-5 credit pulls can start to damage your score. To avoid this stick with three reputable mortgage companies and get quotes from each one.

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How To Figure Out Mortgage Payments Without a Mortgage Calculator

In today's world, taking out a mortgage is necessary for anyone who wants to invest in real estate or simply wants to put a roof over his head. Usually, to find out what a mortgage payment will be on a particular property, a potential buyer needs to contact a realtor or bank to get a quote.

By contacting either one, the buyer risks harassment from a realtor who won't let go of a qualified buyer, or a lender who needs to lend mortgage money to stay in business. Any buyer in his right mind will only go to one of these salespeople when he is ready to go full speed ahead toward a closing.

So, what does a person who is in the early thinking stages of buying a home do? How do you know what the payment will be on a house a seller is asking $250,000 for when the bank is advertising 30-year mortgages at 7%?

By the end of this article you will be making such a calculation in your head. You will be sprouting out the answer to complicated home buying scenarios just as fast as you can find the terms on the mortgage and the price on the house.

$66.53 a Month

First, remember this: $10,000 borrowed for 30 years at 7% will require a monthly payment of $66.53. So, it stands to reason $100,000 for 30 years at 7% requires a monthly payment of $665.30. Also take note you could figure out on a piece of paper with a pencil, $50,000 for 30 years at 7% is $332.65.

Knowing these figures, you automatically know a $250,000 mortgage at 7% for 30 years will require a payment of $665.30 (for $100,000) and another $665.30 (for the next $100,000) and $332.65 (for $50,000). This means the payment will be $1,663.25, or really, really close. A mortgage calculator gives the answer as $1,663.26, but for a wild guess, I'll take it.

A 6% or an 8% Mortgage

Of course, here you ask, "What if I find a mortgage with a lower interest rate?" Well in that case, remember this, $10,000 borrowed for 30 years at 6% costs the borrower $59.96 a month. This means a $1,000,000 mortgage for 30 years at 6% will be 100 times $59.96 or, a monthly payment of $5,996.00. Now, certainly that was easy. All we had to do was add 2 zeros!

Okay, what about if the interest rate is 8%? Here, a 30-year mortgage for $10,000 is $73.38 each month. So a $300,000 mortgage will come at a cost of 30 times that or, $2,201.40 a month.

How About a 7 1/4% Mortgage?

In reality, most times interest rates will not be exactly 6 or 7, or 8%. Even when this is the case, you still don't need a mortgage calculator. If you read about a 30-year $260,000 mortgage at 7 1/4%, for instance, and you want to know what the monthly payment will be, here's what you do. Are you ready? Guess!

That's right! Just guess! You know 7% will cost you $66.53 per $10,000 a month and 8% will cost $73.38 per $10,000 a month. You also know 7 1/4 is somewhere on the lower side between 7 and 8 so take a guess how much 7 1/4% will cost per $10,000 a month. My guess would be maybe, $68.50?

I'll go with that. So, since it is a $260,000 mortgage we're trying to figure the payment for, we will multiply 26 (260,000 / 10,000) X $68.50. The answer is: $1,781.

When I run $260,000 at 7 1/4% for 30 years through a mortgage payment calculator the answer comes out $1,773.66. So, our answer wasn't precisely right, but it was pretty close.

In a case like this, even if we came out with an answer that is $20-$30 off, who cares? Before the real mortgage payment is determined, the cost of a homeowner's insurance policy and property taxes will have to be calculated anyway. So, the best anybody can do at this point is guess.

There you have it. Now, you're a human calculator! As long as you're only concerned with 30-year mortgages, and today's going interest rates, which are 6% to 8%, you can figure out mortgage payments in your head, or maybe with just a little help from a pocket calculator. Congratulations!

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How Does Filing Bankruptcy Affect Your Mortgage?

When someone experiences financial crisis like job loss or business failure, it becomes quite difficult for him to repay the existing loans/debts. Though filing bankruptcy may seem to be a viable option in order to get rid of the multiple debts, yet it may become difficult to qualify for a new mortgage. You should also know that your existing mortgage gets affected when you file bankruptcy.

What happens to your existing mortgage after bankruptcy filing?

When you want to declare bankruptcy, you need to file either chapter 7 or chapter 13. However, the consequences of filing chapter 7 are different from that of chapter 13. The effects on your existing mortgage after filing bankruptcy are discussed below.

Consequences of filing Chapter 13:

You can protect your home from a foreclosure by filing chapter 13 bankruptcy; however, it is advisable that you seek help from an experienced bankruptcy lawyer. By filing chapter 13, you can work on a structured debt repayment plan, which can also take care of your monthly expenses. Usually, you need to repay your loan within 3-5 years. Chapter 13 can also give you automatic stay protection, which can prevent your creditors from suing you. It is also helpful to stop collection efforts during the repayment tenure.

Consequences of filing Chapter 7:

Sometimes filing chapter 13 can be really expensive for the homeowners. In that case, filing chapter 7 bankruptcy is favorable for them. It can free you from your personal liabilities to pay back the existing debts. However, homeowners may still be unable to keep their house after the discharge of bankruptcy.

Reaffirming mortgage debt:

If you want to save your home even after filing chapter 7 bankruptcy, then you need to file a reaffirmation agreement. Once you file the paperwork, the mortgage company may agree to work with you and also approve your plan so that you can clear the delinquent account within a specific time period. It means that you are agreeing to pay off the debt amount, which you owe to your lenders.

Paying for deficiency after foreclosure:

If your bank forecloses your property but cannot recover the unpaid debt, then you might have to pay for the deficiency.

How do you qualify for a new mortgage after bankruptcy?

Go through the following points to know how you can qualify for a mortgage even after filing bankruptcy.

1. Try to rebuild your credit - If you have some debts that you've not included while filing bankruptcy, then try to repay them on time. It will help rebuild your credit so that you can apply for new loans in 2 years of time.

2. Plan a budget and follow it - Analyze your financial status and prepare a budget. Try to follow it in order to save yourself from any more debt problems in future.

3. Try for FHA or VA mortgage loans - It is relatively easier to qualify for an FHA or a VA mortgage loan than that of conventional mortgage loans.

4. Get ready for making a down payment - You may not qualify for a zero down payment mortgage. Therefore, you may need to make a down payment in order to qualify for the mortgage.

5. Check your credit reports regularly - It is really important to check your credit reports regularly. If there are errors, then fix them immediately.

It is quite important to learn from your past mistakes. Therefore, you should not make any more mistakes that can compel you to file another bankruptcy in future. When you are taking out any loan/debt, you should carefully analyze your financial situation in order to ensure that you'll be able to make the required monthly payments on time.

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ASC Mortgage Loan Modification

Falling 30 days behind in payments on your ASC mortgage opens up the possibility of receiving 'loan modification', to lower monthly payments and tack the late payments to the end of the mortgage period. Three major things requires for application include one months of income receipts and bills, the ASC account number and the default letter with a contact number. Qualifying for such loan modifications depends on the debt-to-income ratio. A high ratio generally signifies that ASC won't consider renegotiating the terms of the loan, while a low ratio generally makes modification likelier.

Crucial things needed for ASC mortgage modification loan application include a compilation of all monthly expenses that include credit card payments to TV, phone and food expenses. Determination of monthly income from every source and applying precisely when income is leveled so as to being in a good bargaining position. A determination of the hardships that led to the present situation is very important as well. Sincere causes like loss of a job or the death of an income-earner, mental illness and fire or theft increase chances to get loan modifications from lenders.

Generally when defaulted the ASC sends a default announcement letter. It has a number that the defaulter is suggested to call. The next step after gathering monthly expenses, income and cause of defaulting is to call that number and informing the operator about applying for loan modification. Queries about monthly income, expenses and the loan number are to be answered clearly. If the loan is not possible, the operator generally informs the defaulter then and there. Otherwise, the lender will let know when to send the income documentation. It may take some time and several trials.

It is strongly advised that the caller be persistent and patient when calling, even after being turned down repeatedly. It may take many months of constant contact. Home-owners are shown to win out by persistent and pursuing the modification process repeatedly. The help of a lawyer or a non-profit agency might be sought to handle the lender contacts in later stages. One should continue to build up income throughout the process and increase the value of the house in innovative and inexpensive ways to have equity to show in ASC appraisals.

One may contact 'Hope Now' to help him sail through the process. It is a government-business cooperative effort which provides home owners free advice on such issues.

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