Mortgage Meltdown! What Does It Mean to Homebuyers?

Not long ago, mortgage companies started to offer a smorgasbord of programs to make home ownership easily available to almost everyone. Some of the common terms we have become accustomed to hearing include:

• Low-Doc
• No-Doc
• Full-Doc
• 100% LTV
• Interest Only
• ARM
• Conforming
• Non-Conforming

The housing market has been red-hot for many months, but we are realizing that all these short-term "solutions" have become long-term "problems". For instance, if a potential borrower had a decent credit score, they could obtain a "No-Doc" loan...which meant that they didn't have to submit documentation proving employment, income or debts.

Not only that, but there were the "interest-only" loans, where people could qualify at a very low "teaser" rate...only to find themselves faced with the higher rate within just a few months.

And, can you even imagine giving someone a loan at 125% of the value of their home? It's crazy! This is a recipe for bankruptcy if I ever saw one. Once they have used this money, it's gone. And when they get into trouble, they can't even sell the home without bringing a substantial amount of money to the closing table. Since most people don't have a huge amount of cash laying around, they are a candidate for bankruptcy or foreclosure. These loans should never have been allowed in the first place.

Many mortgage companies offered "adjustable teaser rates" - which meant that the borrower started out with a low interest rate (perhaps for the first year or so)...then jumped to the higher rate, which meant that several times during the life of the loan, their mortgage payment would increase dramatically.

It's so easy to buy a new home with low payments, and many borrowers just don't realize what the higher payments will do to their budget. I wonder who was there to counsel these homebuyers? Who was there to remind them of what was going to happen in a few months? I consider it my obligation to discuss this with my homebuying clients to make sure they understand the ramifications of this type of financing. As an Exclusive Buyer's Agent, part of my job is to counsel my clients in every aspect of their purchase.

Now, because of many of these loan programs, we are facing major foreclosures. Mortgage companies are folding and the entire industry is undergoing a major meltdown.

The bills are coming due! The delinquency rate on low-quality mortgages is at 13.8%, and the rate has doubled on medium-quality mortgages. Foreclosures are at an all-time high! Many areas of the country have real estate markets in the tank...and may take years to recover.

At least 82 high-risk lenders have re-organized or folded, resulting in huge loan losses. Many lenders are not closing on loans they have committed to. If you are in the process of purchasing a home, it would be to your benefit to check with other lenders in case your chosen lender cannot close on your loan. Many companies are simply cancelling loans and in many cases the homebuyer has to start over with a new lender. This can result in the homebuyer having to pay for another appraisal if the new lender won't accept their current appraisal.

The Bottom Line! Basically, if you are purchasing a new home and have solid employment, a good FICO score and at least 5% of the purchase price as a down payment...you should be fine. But, at this time, borrowers will have to prove that they can afford the home. The days of lenders giving borrowers the benefit of the doubt seems to be over. Everything must be documented.

Until this meltdown settles, many of the loan programs that we have been accustomed to will no longer be there. Actually, this will mean that a bit of "common sense" has returned to the mortgage industry. Someone that can't afford a particular home shouldn't buy it in the first place. Borrowers will have to qualify at the normal rate instead of the "teaser" rate. The mortgage industry is simply coming down to earth.

But, on the flip side, potential homebuyers and investors will be able to purchase foreclosed properties at a substantial discount.

Remember, if you plan to purchase a home in the near future...follow these guidelines for a successful transaction:

• Keep your credit score as high as possible. Check it often and take care of any discrepancies. This can mean a huge difference in your interest rate.
• Maintain your employment. Lenders will want to see at least 2 years of steady employment history.
• Save your down-payment money. Make steady deposits into your savings account because lenders will want to see the "paper trail". And they want "seasoned" funds, which means that the money must be in the account for several months prior to loan application.
• Don't purchase a vehicle just prior to your loan application. This greatly reduces your income to debt ratio and could prevent you from purchasing your new home.
• Plan carefully and try to obtain a fixed-rate mortgage. This will insure that your principal and interest will not increase at any time in the future.

For more information, please contact me. I look forward to hearing from you soon!

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125 Percent Mortgage Loan

So changing circumstances can adversely effect your ability to service the loan. It must also be realized that although you may wish to consolidate unsecured debt for example credit cards and loans you will be placing unsecured debt on to a secured loan.

A typical example might be where 95% of the mortgage consists of a secured loan on the property and the rest, the extra 30 % is an unsecured loan. The two amounts will normally be at the same rate which could be for example fixed or variable and both will run the same term. Some terms may stretch to 35 years long.

The advantage of a long term is to be able to have lower monthly repayments providing the mortgage is capital and repayment. However the downside would be the large amount of interest you will be paying to a lender over 35 years, the long term could possibly take the client passed their retirement date and servicing the loan should be considered. Ideally if you are able to make regular over payments along side your monthly mortgage payments or make large lump sum over payments you will reduce the term of the loan and make saving on the total interest you will be paying back to the lender.

Advantage

You may potentially purchase a home if you have no savings for a deposit and solicitors fees etc.

Disadvantages :

Higher interest rate

Few lenders offer a such mortgages so choice is limited

Not available as a Self Certification loan (self cert)

Not available to clients who have an adverse credit rating (bad credit)

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Second Mortgage Loan Basics - What They Are - How To Get approved

It is inherent to have multiple mortgages on a home. The first mortgage is the traditional mortgage. The second mortgage is subordinate. This means that if there is default in payment, the traditional mortgage is to be satisfied first and anything remains would go towards paying the secondary mortgage(s). This is absolutely why second mortgages carry a higher rate of interest. Secondly, similar to first mortgages, second mortgages also have additional costs like closing costs and points, which makes them costlier.

There are in fact any types of second mortgages. One of the easiest to procure allows the homeowner to borrow an whole that would be covered by the equity he has in the house. If the equity totals to ,000, with the first mortgage at ,000, the homeowner can borrow ,000 on the second mortgage. The whole is covered along with the dues on the first mortgage, by the equity in the house. Other type is the line-of-credit second mortgage, where the homeowner does not avail of cash immediately, but gets a line of credit secured against the home instead, allowing him to use it as and when required.

At times, a second mortgage is taken out simultaneously with the first mortgage, to help the mortgagee to qualify for the buy of the new home. For example, if the first mortgage requires a thirty percent down cost and the loan applicant has only twenty percent as his own money, he can go in for a second mortgage for the remaining ten percent.

Then there is also a second mortgage in which you can get a loan up to 125 percent of the value of your home. This type of second mortgage is more difficult to procure and requires a very high credit rating. It has a major disadvantage in the interest not being subject to the advantage of tax deductibility, as mortgage interest is tax deductible only for mortgages secured fully by real estate.

Second Mortgage Loan Basics - What They Are - How To Get approved

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reputation Problems? With a Subprime Mortgage Lender, Poor reputation is Not a qoute

Have you been turned down for a home loan recently because you have a bad reputation history? You may want to consider applying for home financing with a subprime mortgage lender. A subprime mortgage lender is one who specializes in providing financing for habitancy who are difficult for most mortgage companies to finances, it could be because of a low reputation score, hard-to-prove revenue or a combination of those factors with no money to put down.

It can be much easier to get stylish for a loan straight through a subprime lender than with other mortgage loan programs offered by banks and reputation unions. The only downside to a subprime loan is that the fees can be higher at end and the interest rate will be higher. It is smart to apply with a few subprime lenders to assess interest rates. Yes, you will have to pay a higher rate, but make sure the rate is still reasonable. Interest rates are low right now, take advantage of that and get a rate that is reasonable.

Also, remember that you can all the time refinance later at a lower interest rate when your reputation score has improved. Just make sure that there isn't a pre-payment penalty on the loan before you plan to refinance. Most subprime mortgage loans do have a 6 month to 2-3 year pre-payment penalty, meaning that you have to pay a large fee, ordinarily 6 months worth of interest, before you can pay off or refinance the loan. You can expect to have a pre-payment penalty, just make sure you get the shortest whole of time you can before you can pay it off.

Consider applying with a enterprise that will provide you with complicated offers, that will help you be sure you are getting the best interest rate and one of the top subprime mortgage brokers.

To view our list of recommended subprime mortgage companies online, visit
this page: Recommended Subprime Mortgage companies Online.

reputation Problems? With a Subprime Mortgage Lender, Poor reputation is Not a qoute

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Current Mortgage Rates and Fannie Mae's Du Refi Plus agenda

Current 30 year fixed mortgage interest rates are seriously trying to challenge their all time lows while Current Adjustable Rate mortgage interest rates may be at their all time lows especially the 5/1 Adjustable rate mortgages maybe available in the 2% range.

Fannie Mae's Du Refi Plus

In case you haven't heard Fannie Mae's conforming mortgage program has a stock called Du Refi Plus: Fannie Mae 's Du Refi Plus conforming mortgage loan program will allow you to refinance your current Fannie Mae conforming mortgage up to a Loan to Value (Ltv) of 125%

Why would I need a Du Refi Plus?

This singular conforming mortgage program released by Fannie Mae is especially helpful in assisting borrowers who have a higher interest rate yet were unable to refinance their current mortgage due to the value of their property declining.

Du Refi Plus real life example

Let's say you purchased your home for 0,000 and you put 20% down cost for a loan whole of 0,000. You tried to refinance except now your home is unfortunately only worth 0,000 and your principle equilibrium is 238,000, then you add in some conclusion costs and your new loan whole would have to be in the vicinity of 242,000. Fannie Mae's Du Refi Plus program will still allow you to refinance while under normal situations and normal guidelines without this program, it would be impossible to refinance unless you came to the table with money to pay down the principle equilibrium on your mortgage to appropriate levels.

Fannie Mae's Du Refi Plus conforming mortgage program will allow for your current mortgage to be refinanced with a lender who is not the current servicer of your present mortgage. (Contingent on individual lenders' guidelines)

Who is the Du Refi Plus mortgage program for?

Fannie Mae's Du Refi Plus conforming mortgage program is best grand for those borrowers who do not currently have mortgage insurance. Although Fannie Mae does allow for current loans with mortgage guarnatee to be eligible for this program, it is fascinating to find a lender who will allow it. You may be best off to check with your current servicer first if you presently have mortgage guarnatee on your current mortgage.

Fannie Mae's Du Refi Plus conforming mortgage program does not limit borrowers based on reputation score, debt to wage levels, property type or occupancy types as long as the new loan will advantage the borrower and put them into a best situation. All loan applications for this program will have to be run straight through and beloved by Fannie Mae's self-operating Underwriting System. individual lenders may have their own guidelines and requirements even if your loan application is beloved by Fannie Mae's Aus engine.

Du Refi Plus loan amounts

Fannies Mae's Du Refi Plus mortgage program also includes loan amounts greater than 417k (for singular family Residences) which are allowed in both their permanent High equilibrium loan program (625,500 max for a Sfr) and their Temporary High equilibrium program (729,750 max for a Sfr) based on the proper limits per individual areas.

Freddie Mac's Conforming Mortgage Loan

Freddie Mac's Relief Refinance program also offers a conforming mortgage loan program very similar to Fannie Mae's conforming mortgage loan program Du Refi Plus. Freddie Mac's program also allows a refinance of a current Freddie Mac loan up to 125% Ltv. Efficient October 1, 2009 Freddie Mac released their "Open Access" program which will allow any lender to refinance another servicer's mortgage as long as the new and current mortgage are both Freddie Mac loans. Up until October 1st, Freddie Mac only allowed the current mortgage servicer to refinance the mortgage.

In spite of the current state of the economy, there are a lot of foreseen, opportunities to finance a purchase of a new home or refinance your current home at what may be carefully interest rates at ignorant levels: Definition of ignorant from Webster's Dictionary: "lacking knowledge or insight of a the thing specified' While it may be difficult to comprehend current mortgage interest rates at these levels that doesn't mean they do not exist or not available.

The Federal Government's First Time Home Buyer Tax reputation of up to 8 thousand dollars expires in 1 month and 24 days.

Current Mortgage Rates and Fannie Mae's Du Refi Plus agenda

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Poor reputation Home Mortgage Loans - The Role of the Fico Score

If you have bad reputation history and are finding to get a home mortgage loan, then chances are you are going to need to know all about how the Fico reputation scoring theory works.

Fico - Fair Isaac & firm - is the foremost reputation reporting group that lenders turn to when it comes time to reputation scoring your home loan mortgage application; so if you do have bad reputation history, these guys will know.

The method used by Fico cannot be disclosed because of a decision made by U.S. Congress. There are some things ordinarily known about Fico which that could help you understand why and how you can get approved:

1. The higher your Fico score, the great opening you have of getting that home mortgage loan. Also, the higher your score, the more room you have to negotiate a lower interest rate.

2. If you have a Fico score lower than 500, there is very petite opening you'll be getting a mortgage home loan.

That said, if you have a score of:

500 - 600 you should be able to get a home mortgage loan, provided you are willing to make a down payment.

600 - 640 You should get a 100% home loan financing. Thats right, with no money down.

640 - 700 You should be able to be stylish for a 125% home mortgage loan.
700+ You're in the drivers seat! You should be able to get an perfect rate with perfect terms.

3. Fico depends on each reputation report, so before you apply for a home mortgage loan, if you have bad reputation history, get a copy of your reputation record and make sure there is nothing on there that shouldn't be there. If there is, get it changed before you apply for the home mortgage loan.

4. Wait until after you have purchased or refinanced your home before you buy whatever added on credit. More loans or higher balances can have a dramatic result on your mortgage approval, regardless of whether or not you had over a 600 Fico score before you bought on credit.

5. Remember, the Fico score is only a part of your home mortgage loan application, so if at first you don't result in getting your home loan mortgage, don't give up. Some lenders may still be willing to lend to you!

People with bad reputation often don't understand how the reputation scoring theory works. It is useful to find out more about it when finding to get a home loan with less than perfect reputation to bad reputation or when dealing with sub prime mortgage lenders.

To view our list of recommended bad reputation mortgage lenders online, visit this page: Recommended Bad
Credit Mortgage Lenders

Poor reputation Home Mortgage Loans - The Role of the Fico Score

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Don't Get Mortgage advice From "Experts" on the Today Show

As I was getting ready for work Tuesday morning, The Today Show on Nbc had a segment with Barbara Corcoran, a "real estate expert", about refinancing. Being a loan officer, I watched intently, hoping Ms. Corcoran would dispense good advice about the multitude of opportunities available for refinancing. While some of her advice was accurate, she made a estimate of points in the allotted three-and-a-half little segment that were so erroneous and misleading, I had to respond.

The video can be found on the Today Show website. I suggest watching it first.

I suppose pointing out that getting any financial advice in a three-and-a-half little segment is not a good idea. Moreover, Ms. Corcoran sold her real estate enterprise in 2001 for seventy million dollars. While I respect her success, she is no longer complex in an industry that is vastly different now and her palpate was that of an real estate agent/saleswoman, not a mortgage professional. Hopefully, the segment prompts viewers to palpate a mortgage expert for more in-depth personalized advice. I know she meant well, but I have a real problem with the following tips from Ms. Corcoran:

• 80% Ltv can "typically get refinancing"
While the statement is true, she seemed to imply that if your mortgage is more than 80% of the home's value (commonly referred to as Ltv or Loan-to-Value), you cannot refinance. Nothing could be supplementary from the truth. In fact, there are government sponsored/supported programs that allow homeowners to refinance up to 125% of their homes value. Being over 80% does not automatically forestall anything from refinancing.
• 720 Fico for best rates
Again, the statement is mostly true, except that the best rates are for those who have a 760+ prestige score. In fact, rates may differ at 760, 740, 720, 700, 680... You get the idea. However, mortgage interest rates are thought about by a estimate of factors together with Ltv, prestige score, your state of residence, unabridged debt profile, and others.
• Ask for a term equal to that remaining on your current mortgage or "you'll get ripped off on that interest rate."
You will not get "ripped off" if you get a new 30 year mortgage. In fact, a new 30 year mortgage is likely the best way to accumulate the lowest monthly payment. Getting a new mortgage equal to that of your remaining term is standard in some cases. Ask your loan officer to show you the cost differences of various terms and programs.
• Pre-payment penalties.... Don't get one and don't refinance if you have one.
This one is no ifs ands or buts egregious, primarily because it can cost you a lot of savings. If you currently have a pre-payment penalty, refinancing now at a low rate may offer savings benefits that offset the penalty. If you wait for the pre-payment penalty to expire, interest rates will likely be higher. Ms. Corcoran made a good point about peak-even analysis, and a pre-payment penalty should be part of that. If anything offers you a new loan with a pre-payment penalty, Run!!! Pre-payment penalties are virtually extinct, as they were part of the sub-prime mortgage world that is no longer in existence. This piece of advice would have been helpful in 2005 but is misguided and irrelevant in 2010.
• No conclusion costs, no points. Lenders will bury the costs in the instrument.
The intimation is that a no conclusion cost/no points loan is a bad thing. Not true. A customer selecting a no conclusion cost/no points loan will trade those costs for a higher interest rate. It's that simple. Once again, have a mortgage expert show you the dissimilarity in a traditional mortgage and a no conclusion cost/no points mortgage loan.
• It take 90 days to refinance.
Bogus. Typically, refinances are taking 45 days. I have heard bad dream stories from clients when they use a traditional pick-and-mortar bank where loans have taken six months. Possibly it's different in Manhattan but for the rest of us, there is no excuse for more than 60 days in a worst case scenario.
• Pmi 1.75% going up in April.
This is misleading and incomplete. Pmi is hidden Mortgage Insurance. The 1.75% Ms. Corcoran refers to is the Fha Mortgage assurance Premium, or Mip. Hud has proposed raising the Mip to 2.25% this year. Mip is typically financed into the loan. Fha insured mortgages do wish Monthly assurance (Mi) of either.50% or.55% but it is normally much less than Pmi. Pmi is required if you have less than 20% equity and a approved mortgage. Pmi rates vary depending on several factors and is typically paid each month as part of your monthly payment. Again, ask your loan officer to show you the cost differences.

What is comes down to is that a mortgage expert can help you conclude if refinancing is is your best interest. Sometimes, refinancing is not the best selection for you right now. Don't make the decision based on sound bites from a Tv show. Ask a mortgage expert to sit down with you and witness your current financial situation. It won't cost a penny and may save you thousands of dollars.

Don't Get Mortgage advice From "Experts" on the Today Show

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Some Inside Facts About Mortgage associates With 125% Funding

Mortgage companies with 125% funding are the companies that allow you to borrow a second mortgage against your home. This allows you to borrow more money than what your house is worth. But how is this beneficial to us? When you borrow more money, you can use the supplementary amount to merge all your bills into one and pay it all off.

The Vanishing Bills

So very soon, you will see all your reputation card, loans and other bills vanishing all together thanks to the companies with 125% mortgage funding. Your interest rates that you are paying for your short-term loans will also decrease further. Many citizen feel that the companies with 125% mortgage funding cause citizen to growth their debt supplementary by borrowing more money than they can pay off. But this is just a myth and the truth is that you trade one interest rate for someone else one.

How Long Are You Planning To Stay In This House?

This is a question that you need to ask yourself. A few years from now, the value of your asset could convert dramatically, allowing you to capitalize on it. So why not take advantage of the chance in case,granted by the companies with 125% mortgage funding? As the value of the asset changes, so will your payment and interest. If you have a decent reputation history, then the 125% loan is the best choice ready to you right now to do some consolidation and to save on a lot of money. Now no lender fees or an evaluation is required for you to get the loan.

Some Inside Facts About Mortgage associates With 125% Funding

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Land A Second Mortgage With A 125% Ltv Bad reputation Loan Deal - 5 Tips

There is no doubt that when money is tight, you can start to feel the pressure on you 24/7 to find a way to get the funds you need. Sometimes the pressure comes from mounting prestige card bills or other quarterly expenses. At other times, it comes from a pending large (but unusual) charge such as an upcoming wedding or an unexpected funeral cost. And, still other times it comes from having to take care of urgency car or home repairs.

There is no doubt that for each and every one of us, the money that is left over after you pay down all of your expenses can vary quite a bit from month to month. Rich or poor, there are just plain times when you need something extra. If you happen to own a home, you may be able to qualify for a second mortgage to get the money you need - even if you have a bad prestige score.

If you want to land a second mortgage, these five 125% bad prestige loan deal tips can help:

1. A second mortgage is also called a home equity loan:

A second mortgage is simply a way to take out a loan while using your home's equity as collateral. They are sometimes called second mortgages because the first mortgage lender would have first possession to any claims on your home, in case you were ever unable to repay your loans. If there is anyone left over, the second mortgage lender would then be able to recover the remaining assets, up to the amount of the excellent loan. Other name for a second mortgage loan is "home equity loan."

2. You can use the money for anyone you like:

Once your loan funds, you can use the money for any purpose you like. Many second mortgage borrowers use the cash from the loan to fund home improvements, pay off high-interest prestige card debt, pay down curative bills, or even take a vacation.

3. Most second mortgages have a loan-to-value limit:

When you read the details about any given lender's mortgage products, you will find that most of them have distinct loan-to-value (Lvt) requirements. For example, an 80% Ltv second mortgage means that they will allow you to borrow up to 80% of your home's appraised value. Remember, included in the "amount borrowed" is the excellent value of your existing first mortgage.

While 70% or 80% Ltv loans are the most common, some lenders will allow you to go up to 100% or 125% Ltv.

4. Infer your loan to value:

To Infer the type of Ltv loan you will need in order to borrow the cash amount you want, start by adding the amount you want to borrow to the current excellent first mortgage equilibrium (unpaid balance). Then, divide those into your home's value. If the effect is 1.25 or lower, you can get the money you need with a 125% bad prestige second mortgage.

5. If you have bad credit, quest for "bad prestige second mortgage lenders":

For those with a bad prestige score (say, under 600), you will need to specifically seek out bad prestige second mortgage lenders. They specialize in working with population who have poor prestige scores. Make sure you target at least 3-5 lenders before starting to make calls or applying online.

Take these 5 tips into how to land a 125% bad prestige second mortgage.

Land A Second Mortgage With A 125% Ltv Bad reputation Loan Deal - 5 Tips

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125% Home Equity: No Equity Second Mortgage Loans for First Time Home Buyers

A 125% home equity loan (also known as no equity loans, 125 home equity loans and 125 loans) is a second mortgage that requires no equity but the loan allows you to borrow up to 125% more than the current combined loan to value (Cltv) ratio of your home. The Cltv is the proportion of more than one loan secured by your home in relation to its value. This is separate than loan to value (Ltv), which only involves the proportion of a particular loan in relation to its value.

Wikipedia provides these examples to help habitancy understand the contrast in the middle of Ltv and Cltv:

Loan To Value:

Property valued at 0,000.00

1st mortgage = 0,000.00

Ltv = 90%

Combined Loan To Value:

Property valued at 0,000.00

1st mortgage = 0,000.00

2nd mortgage = ,000.00

5,000 Total mortgage balance

Cltv = 112.5%

125% loans are generally fixed interest rate installment loans, and they are particularly favorite among first time home buyers who don't yet have equity in their homes for debt consolidation, manufacture home improvements, buying furniture, landscaping, consolidation of auto loans, personal loans and other high-interest loans, paying medical expenses and college tuition. 125 loans may also be used for mortgage refinancing of a current second mortgage.

Even with rising interest rates, a 125% loan offers borrowers lower rates than prestige cards and personal loans, and it may also provide astronomical tax benefits. When used wisely, 125 home equity loans can be a relatively low-cost way to borrow money for big expenses and debt consolidation.

125% home equity loans are for those who plan to stay in their home until their property value increases significantly because the home cannot be sold unless the home equity loan is paid off in expanding to the first mortgage. Also, because lenders face a higher risk of default due to there being no equity in the home, the interest rates are higher than those of a conventional home equity loan.

125% home equity loans typically need that the borrower has good credit. However, even if your prestige is less than perfect, you may still be able to qualify for a 125% home equity loan. If not, you may want to consider mortgage refinancing or a appropriate second mortgage loan once your Fico prestige scores improve.

125% Home Equity: No Equity Second Mortgage Loans for First Time Home Buyers

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Are cost option Mortgage Loans Worth The Risk?

Payment choice mortgages are all the rage in Southern California. With ridiculous buy prices for homes up and down the coast, borrowers need a loan that can help them qualify for their high priced dream home. Along comes the "payment choice Arm", a loan that gives the consumer several choices each month for paying their mortgage back. This beloved loan allows homeowners to make a cost for less than the interest accrued, and the loss of interest is added to the considerable of the loan later. Lenders will for real add clauses to the mortgage note that consist of parameters for the loan balance having the ability to grow up to 125%. These loans offer an introductory duration of reduced payments with deferred-interest. The cost choice mortgage shifts the paying back choices into the borrowers hands. population have the ability to be responsible and make a responsible cost each month, so their loan is paid in full in 30 years, or they can risk their homes equity and make the minimum payment.

Fully Indexed cost (principal and interest)

Interest Only Payment

Minimum cost (negative amortization)

According to Bryan Wilson a mortgage broker in Orange County, "these loans offer increased buy power for population because the introductory payments can sometimes allow borrowers to qualify for a home that would cost them 0,000 more with a primary mortgage." He continued, "Consider this...someone could get a million dollar loan for less than ,500 a month. With a primary 30 year fixed mortgage at 6.5% a million dollar loan would cost you over ,300 a month." That is a shocking cost dissimilarity that many southern Californian residents could not pass up. Critics have all the time voiced concerns about the implications that negative amortization loans could have. Mortgage bankers have countered with the discussion that if your home increases 25-30% a year, then the downside of 5-10% negative amortization is minimal. With home property values soaring in the last five years, homebuyers in southern California have been earning equity in their home at a breathtaking pace. With that being said, you can understand why so many population are attracted to the cost choice mortgage.

Recently some of the country's prominent bank regulators have issued concerns about home mortgage loan that have "artificially low beginning payments." John C. Dugan, the Comptroller of the Currency, spoke to a group of in Los Angeles last week about the risks of introductory rate loans. population need to realize that their introductory low payments will increase significantly in time. Dugan continued, "After the petite introductory duration ends, the monthly cost for the holder of non-traditional mortgages must increase & even if interest rates stay flat & the size of that increase can be very substantial." He noted that in some cases mortgage payments could increase a 100%. The bottom line is that people, who can't afford their cost in the future, will be forced to sell their home. In some cases population will loose their home in a foreclosure. If the rate of foreclosure begins to increase rapidly, then mortgage rates could be affected adversely.

One major concern of the choice arm mortgage is the restrictions for hereafter subordinate financing. frequently when population buy a home they don't anticipate that they will need a second mortgage or home equity loan. The irony is that many of these borrowers are beginning off with an adjustable rate second mortgage or line of credit. If you buy a home with an 80-10 or 80-20 loan, the chances of you wanting to refinance the adjustable rate second loan are very good. usually the interest rates on the second loan are significantly higher, and as the value of your home increases, you may want to refinance the loan into a lower fixed interest loan. When population get into a negative amortization first mortgage, they are very petite on financing a home equity loan. Most lenders will intuit the combined loan to value at the maximum potential of 125%. So you take your existing mortgage balance and multiply it by 125%, and then divide by your homes' appraised value. If you are above 100% most lenders won't enlarge you any home equity loan options.

We offer second mortgages behind negative amortization first loans, but the rates are higher, and the reputation requirements are more demanding. If you plan on financing home improvements, buying furniture or consolidating debt, then I would not advise the cost choice mortgage.

Interest only mortgage loans make up over 25% of the mortgage market, which only accounted for 10% of the store share a few years ago. The beloved cost choice mortgages make up over 10% of the mortgage market, whereas 2 years ago it held less than 1% of the store share. The increased popularity has regulators reconsidering the disclosure process for adjustable rate mortgages. whether you borrow money with a home equity line of reputation or refinance with a variable rate mortgage, you need to realistic about budgeting your mortgage cost 6 months from now, as well as five years from now. reconsider paying further money towards the considerable every other month. Ask your loan officer what the fully amortized cost would be for a shortened period, like 20 years. Every other month you should make that cost and you will come out ahead quicker. The further money that you lead to the considerable will increase the equity in your home, and sacrifice the years you have to pay back the loan. If you have anticipate that you will not be able to pay further money towards the principal, then you should reconsider borrowing less because if the housing store dips at all you could find yourself in some trouble.

Are cost option Mortgage Loans Worth The Risk?

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What is Mortgage Loan to Value?

You might hear the term loan to value or Ltv used a lot when you're searching or applying for a mortgage. It might even be the choosing factor in your mortgage approval. What exactly is Loan to Value (Ltv) and how might it sway your next mortgage?

Loan to value is the ratio of the loan estimate to the buy price or appraised value; whichever is less. You can nothing else but suspect the loan to value by dividing the loan estimate by the buy price or appraised value as seen in the example below:

Appraised Value: 0,000
Loan Amount: 0,000
0,000 / 0,000 equals .75 or 75% loan to value.

As you can see, it is very easy to suspect loan to value and it's also quite foremost because it is a primary loan characteristic that is used to asses mortgage risk. If the Ltv is too high, you might not get the loan you had hoped for. If the Ltv is too low, there's nothing else but no negative effect. Lenders love low Ltv loans because if you should default on your mortgage, the lender has a very good occasion of recouping their venture if the house is foreclosed on. We all hope that doesn't happen of course.

Most people are curious in the maximum loan to values or the loan to value at which you do not have to pay mortgage insurance. In the case of conventional mortgages, the Ltv must be 80% or less in order to not have to pay mortgage insurance. In the case of Fha mortgages, no matter what the Ltv is, you will pay a mortgage insurance prime on Fha mortgages for at least 5 years.

Conventional loans allow Ltv's of 95% unless it is an area where property value has been declining. Fha purchases allow Ltv's of 97% and 95% on a cash out refinance.

What is Mortgage Loan to Value?

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Mortgage Meltdown! What Does It Mean to Homebuyers?

Not long ago, mortgage companies started to offer a smorgasbord of programs to make home proprietary nothing else but ready to roughly everyone. Some of the common terms we have come to be accustomed to hearing include:

• Low-Doc
• No-Doc
• Full-Doc
• 100% Ltv
• Interest Only
• Arm
• Conforming
• Non-Conforming

Va Loan 125 Ltv

The housing shop has been red-hot for many months, but we are realizing that all these short-term "solutions" have come to be long-term "problems". For instance, if a inherent borrower had a decent reputation score, they could accumulate a "No-Doc" loan...which meant that they didn't have to submit documentation proving employment, income or debts.

Not only that, but there were the "interest-only" loans, where habitancy could qualify at a very low "teaser" rate...only to find themselves faced with the higher rate within just a few months.

And, can you even dream giving person a loan at 125% of the value of their home? It's crazy! This is a formula for bankruptcy if I ever saw one. Once they have used this money, it's gone. And when they get into trouble, they can't even sell the home without bringing a astronomical whole of money to the closing table. Since most habitancy don't have a huge whole of cash laying around, they are a candidate for bankruptcy or foreclosure. These loans should never have been allowed in the first place.

Many mortgage companies offered "adjustable teaser rates" - which meant that the borrower started out with a low interest rate (perhaps for the first year or so)...then jumped to the higher rate, which meant that any times while the life of the loan, their mortgage cost would increase dramatically.

It's so easy to buy a new home with low payments, and many borrowers just don't perceive what the higher payments will do to their budget. I wonder who was there to counsel these homebuyers? Who was there to remind them of what was going to happen in a few months? I think it my obligation to discuss this with my homebuying clients to make sure they understand the ramifications of this type of financing. As an Exclusive Buyer's Agent, part of my job is to counsel my clients in every aspect of their purchase.

Now, because of many of these loan programs, we are facing major foreclosures. Mortgage companies are folding and the entire industry is undergoing a major meltdown.

The bills are advent due! The delinquency rate on low-quality mortgages is at 13.8%, and the rate has doubled on medium-quality mortgages. Foreclosures are at an all-time high! Many areas of the country have real estate markets in the tank...and may take years to recover.

At least 82 high-risk lenders have re-organized or folded, resulting in huge loan losses. Many lenders are not closing on loans they have committed to. If you are in the process of purchasing a home, it would be to your benefit to check with other lenders in case your chosen lender cannot close on your loan. Many companies are simply cancelling loans and in many cases the homebuyer has to start over with a new lender. This can result in the homebuyer having to pay for other evaluation if the new lender won't accept their current appraisal.

The bottom Line! Basically, if you are purchasing a new home and have solid employment, a good Fico score and at least 5% of the buy price as a down payment...you should be fine. But, at this time, borrowers will have to prove that they can afford the home. The days of lenders giving borrowers the benefit of the doubt seems to be over. everything must be documented.

Until this meltdown settles, many of the loan programs that we have been accustomed to will no longer be there. Actually, this will mean that a bit of "common sense" has returned to the mortgage industry. person that can't afford a particular home shouldn't buy it in the first place. Borrowers will have to qualify at the normal rate instead of the "teaser" rate. The mortgage industry is simply advent down to earth.

But, on the flip side, inherent homebuyers and investors will be able to buy foreclosed properties at a astronomical discount.

Remember, if you plan to buy a home in the near future...follow these guidelines for a victorious transaction:

• Keep your reputation score as high as possible. Check it often and take care of any discrepancies. This can mean a huge difference in your interest rate.
• Maintain your employment. Lenders will want to see at least 2 years of steady employment history.
• Save your down-payment money. Make steady deposits into your savings account because lenders will want to see the "paper trail". And they want "seasoned" funds, which means that the money must be in the account for any months prior to loan application.
• Don't buy a car just prior to your loan application. This greatly reduces your income to debt ratio and could prevent you from purchasing your new home.
• Plan considered and try to accumulate a fixed-rate mortgage. This will insure that your principal and interest will not increase at any time in the future.

For more information, please feel me. I look send to hearing from you soon!

Mortgage Meltdown! What Does It Mean to Homebuyers?

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Mortgage Loans - Ltv (Lending Risk Ratio)

When buying your home, it is imperative to have as much money as possible for your down payment. Not only should you save for your down payment, but also tap your personal savings, any stocks, bonds and real estate, and gather your house gifts. Customarily, lenders require a down payment of at least 20% of the home's purchase price, as well as require a ratio of at least 75% for your loan to be approved.

What is the Ltv Ratio?

125 % Ltv Loans In 2011

The Ltv, or lending risk ratio, is thought about by dividing the mortgage loan number (after subtracting your down payment) by the value of the property. The higher your down payment, the lower this ratio will be. The lower the Ltv the economy your mortgage costs in the end, and the great chances you have at securing your loan.

High Ltv Disadvantages

If your Ltv is high, it can influence your ability to gather the loan in a myriad of ways. A high Ltv is a risky situation in the lender's perspective, because high Ltv loans are more at risk to default. If you are competing with other buyers, the lender will most always go with the lower Ltv and a larger cash down payment. It can influence your chances of buying.

If you have a high Ltv, you are also most likely going to be dealing with higher interest rates and added insurance costs to safe the lender. These extra costs will growth the cost of your mortgage in the long run and make your payments higher. If you don't have the 20 percent cash down payment, some lenders will require you to have a larger monthly income to qualify for a 95 percent Ltv mortgage. The loan number is the same, but if your down payment is low, they will need more security.

Prepare When Obtaining a Mortgage Loan

With a small preparation, and possibly some patience, you can save 20 percent or more of the home's purchase price and steer clear of the hassle and extra costs. If you find this is not possible, it may be time to look at a home with a lower price. It's great to be able to afford your home, than to tie yourself in a situation with a opening of default.

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Don't Get Mortgage guidance From "Experts" on the Today Show

As I was getting ready for work Tuesday morning, The Today Show on Nbc had a segment with Barbara Corcoran, a "real estate expert", about refinancing. Being a loan officer, I watched intently, hoping Ms. Corcoran would dispense good guidance about the multitude of opportunities available for refinancing. While some of her guidance was accurate, she made a number of points in the allotted three-and-a-half minuscule segment that were so erroneous and misleading, I had to respond.

The video can be found on the Today Show website. I suggest watching it first.

Va Loan 125 Ltv

I suppose pointing out that getting any financial guidance in a three-and-a-half minuscule segment is not a good idea. Moreover, Ms. Corcoran sold her real estate firm in 2001 for seventy million dollars. While I respect her success, she is no longer involved in an industry that is vastly different now and her palpate was that of an real estate agent/saleswoman, not a mortgage professional. Hopefully, the segment prompts viewers to palpate a mortgage pro for more in-depth personalized advice. I know she meant well, but I have a real question with the following tips from Ms. Corcoran:

• 80% Ltv can "typically get refinancing"
  
While the statement is true, she seemed to imply that if your mortgage is more than 80% of the home's value (commonly referred to as Ltv or Loan-to-Value), you cannot refinance. Nothing could be further from the truth. In fact, there are government sponsored/supported programs that allow homeowners to refinance up to 125% of their homes value. Being over 80% does not automatically preclude anyone from refinancing.


• 720 Fico for best rates
  
Again, the statement is mostly true, except that the best rates are for those who have a 760+ reputation score. In fact, rates may differ at 760, 740, 720, 700, 680... You get the idea. However, mortgage interest rates are carefully by a number of factors together with Ltv, reputation score, your state of residence, comprehensive debt profile, and others.


• Ask for a term equal to that remaining on your current mortgage or "you'll get ripped off on that interest rate."
  
You will not get "ripped off" if you get a new 30 year mortgage. In fact, a new 30 year mortgage is likely the best way to gain the lowest monthly payment. Getting a new mortgage equal to that of your remaining term is accepted in some cases. Ask your loan officer to show you the cost differences of discrete terms and programs.


• Pre-payment penalties.... Don't get one and don't refinance if you have one.
  
This one is absolutely egregious, primarily because it can cost you a lot of savings. If you currently have a pre-payment penalty, refinancing now at a low rate may offer savings benefits that offset the penalty. If you wait for the pre-payment penalty to expire, interest rates will likely be higher. Ms. Corcoran made a good point about peak-even analysis, and a pre-payment penalty should be part of that. If anyone offers you a new loan with a pre-payment penalty, Run!!! Pre-payment penalties are virtually extinct, as they were part of the sub-prime mortgage world that is no longer in existence. This piece of guidance would have been helpful in 2005 but is misguided and irrelevant in 2010.


• No windup costs, no points. Lenders will bury the costs in the instrument.
  
The intimation is that a no windup cost/no points loan is a bad thing. Not true. A buyer choosing a no windup cost/no points loan will trade those costs for a higher interest rate. It's that simple. Once again, have a mortgage pro show you the dissimilarity in a former mortgage and a no windup cost/no points mortgage loan.


• It take 90 days to refinance.
  
Bogus. Typically, refinances are taking 45 days. I have heard bad dream stories from clients when they use a former pick-and-mortar bank where loans have taken six months. Possibly it's different in Manhattan but for the rest of us, there is no excuse for more than 60 days in a worst case scenario.


• Pmi 1.75% going up in April.
  
This is misleading and incomplete. Pmi is hidden Mortgage Insurance. The 1.75% Ms. Corcoran refers to is the Fha Mortgage assurance Premium, or Mip. Hud has proposed raising the Mip to 2.25% this year. Mip is typically financed into the loan. Fha insured mortgages do want Monthly assurance (Mi) of either.50% or.55% but it is commonly much less than Pmi. Pmi is required if you have less than 20% equity and a approved mortgage. Pmi rates vary depending on several factors and is typically paid each month as part of your monthly payment. Again, ask your loan officer to show you the cost differences.

What is comes down to is that a mortgage pro can help you decree if refinancing is is your best interest. Sometimes, refinancing is not the best choice for you right now. Don't make the decision based on sound bites from a Tv show. Ask a mortgage pro to sit down with you and observe your current financial situation. It won't cost a penny and may save you thousands of dollars.

Don't Get Mortgage guidance From "Experts" on the Today Show

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

Mortgage Refinance 125% Ltv 2011

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". Beginning from "go" move tokens around the board agreeing 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 fetch rents from opponents landing there. Rentals are greatly increased if you put houses (those exiguous 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 choosing 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 added 10 per cent interest as well as the main value.

Houses or hotels cannot be mortgaged. All structure 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 whole 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 whatever 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 buy 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 unblemished 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 opportunity spaces which players land on. Instructions fluctuating from winning dollars to 0 dollars are given. Sometimes players even land in jail! This game is undoubtedly a clever and amusing entertainment.

Monopoly and Mortgage: Playing the Game

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Underwriting Parameters of commercial Mortgage Refinance

Property owners conducting a market mortgage refinance are often surprised by the new range of loan programs that have come to be available in the last 5 years. Programs such as market 30 year fixed, second lien position loans, etc are turning heads. However the process is still expensive and time interesting and underwriting is still tied to the fundamentals - loan to value, debt aid coverage ratios, global income, property analysis, and prestige worthiness of the borrower.

Below is a brief narrative of the underwriting guidelines for refinancing a market mortgage.

Loan-to-Value Ratio

Ltv

Loan to value restrictions on your typical market mortgage refinance are dinky to 80% on rate and term and 75% on cash out refinances. However this guild line is what separates many banks from each others. Some get more aggressive and offer higher ltv's while others stay conservative and stay well below the percentages mentioned above.

This ratio is requisite to banks as they underwrite files with the worst case scenario in mind - "what if the borrower defaults and we have to take this property back and sell it on the open market?" The lower the loan to value, the less risk for the lender and therefore lower rate for the borrower.

Dscr

On speculation properties the Debt aid Coverage Ratio restrictions are typically set at a 1:1.25. Meaning that for every .25 of net wage (income after taxes, insurance, repairs, etc) the property produces, the mortgage payments cannot exceed .00. Said in other way, after all expenses and the mortgages have been paid, the owner needs to net $.25 to qualify for the typical market mortgage refinance.

Lenders that allow lower Dscr are thought about more aggressive (and commonly charge higher rates) while banks with higher Dscr requirement are the thought about the opposite - more conservative.

Global Income

For owner occupants a distinct type of ratio is used called the Global wage approach. Basically this ratio compares All wage the borrower has, together with firm profit, salary, dividends etc to All the expenses the borrower has together with personal and business. The maximum Global ratio commonly is 60%. For example, on monthly basis, if the borrower's total personal and firm wage is ,000, his total monthly debt cost would not be allowed to exceed ,000.

Property Analysis

The type of construction being refinance has a major impact on what financial options are available. For example, there's a huge distinction in what a bistro would qualify for vs. An apartment building. Market value, Market rent, appearance, location, accessibility, local Market conditions, as well as other factors play a major role into what refinance options will be available.

Credit Worthiness

The personal prestige worthiness of the borrower will be heavily scrutinized as this is an leading component. A 680 prestige score is the threshold for the best finance options. For smaller mortgages, prestige scores play a bigger role in the underwriting decision and interest rates are heavily influenced by the borrower's prestige score.

Every market mortgage refinance is unique and needs to be thought about on an individual basis. However, the above can give you a good idea of what the basic underwriting parameters are.

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Stated Mortgage Loan Programs

Are you trying to refinance your mortgage or buy a new home? Has your mortgage broker or inventory administrative recommended stated mortgage loan programs that you do not understand whatsoever? There are reasons why they might recommend these programs and reasons why you should avoid them. Here is what you need to know about stated mortgage loan programs.

First, if you are a typical worker that collects a paycheck each week or every other week, then this is a agenda that you need to avoid. It is being recommended to you because they cannot get the loan done with an additional one program. This is commonly a sign that the mortgage you are trying to get is one that you really cannot afford and the stated agenda will just set you up for failure and perhaps foreclosure.

Mortgage Refinance 125% Ltv 2011

Second, if you are self employed, then this is your program. It was originally designed for self employed individuals because they have a lot of issue proving their real revenue and this makes it very difficult for them to be beloved for other types of mortgages. This is the excellent agenda for self employed and if you have very good credit, then it will be a very easy mortgage for you to obtain.

Third, if you are a tipped employee, independent contractor, deal drugs, prostitute yourself, or get paid cash for a service, then this might be the agenda for you as well. These types of individuals have a lot of issue proving their revenue or cannot do so because of what they do so the stated mortgage loan programs work out very well for them. However, these individuals should all the time try to qualify for a dissimilar agenda first before trying the stated revenue program.

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Refinance or Second Mortgage? Combining 1st & 2nd Mortgages Together

I had a new conversation with one of my clients, Mr. Jackson, who is a finance savvy homeowner from Virginia Beach, Va. He asked me an enthralling examine that I wanted to share with you, because it seems to be a tasteless dilemma for homeowners in many states.

What the best explication for refinancing my first & second mortgages? Mr. Jackson elaborated, "I have an 6% 1st mortgage with a balance of 5,000, and a second mortgage at 14% with a balance of ,500. We did a 125% second mortgage to pay off some credit cards. If I add the loans together, we exceeded our homes equity, as the property was appraised at 0,000. We are satisfied with the 1st mortgage rate, but we wanted to lower the rate on the second mortgage. A few years have passed since we took out the 2nd loan back in 2002, and importantly our home's value has increased to about 5,000." He continued, "Should I refinance the second by itself and try and get a lower rate, or should I refinance the 1st and 2nd mortgage together for one mortgage payment?"

Mortgage Refinance 125% Ltv 2011

Wow, what a good question. I praised my client for consolidating his credit card debts with a fixed rate loan. He was very satisfied with his monthly savings with the 125% loan and because it exceeded his property value, he did not reconsider refinancing that loan until neighbor hood housing costs went up significantly. Now that his house has increased its value it appears that his combined loan to value was under 100%. His refinancing options come to be much greater with the increased equity from the home appreciation.

I asked Mr. Jackson a few questions so I could help him find the best solution. How is your credit? Do you know your credit score? Is there a pre-payment penalty on your second mortgage?
Does your first mortgage have a fixed interest rate?
Jackson answered quickly: 689 credit score no pre-payment penalty after 3 years, and his 1st mortgage is at 6% with a 30 year fixed rate.

Combining first and second mortgages into one loan can be challenging, but sometimes it makes sense financially as well as being practical. In Jackson's case, the best selection was to leave his first mortgage alone, and plainly refinance the 125% home equity loan with a 95- 100% second mortgage to lower his monthly payments. So Mr. Jackson was approved for a fixed rate 2nd mortgage. He had inquired about a home equity line of credit, but I reminded him that they have adjustable rates that have been increasing rapidly in the last few years. Since he was paying off long term debt, a fixed rate loan with simple interest was the only way to go. I was excited for Mr. Jackson, because we were able to get him approved for a loan with no pre-payment penalty and we were able to reduce the windup costs, because of his credit score.

Depending on the home equity program, 2nd mortgages may cost you a few thousand dollars in windup costs. Most windup costs are tax deductible and getting the bottom possible rate pays off in the long run. For example, With a 15 year term, you would recover the cost of the second mortgage within a few years, so if you can get 1% or more good paying some windup costs, it would be good than a home equity loan with no points. The lending reality is that most no point no fee 2nd mortgages need credit scores over 700, and the combined loan to value will most likely need to be under 90%.

If you are able to get the second mortgage with no penalty for early payoff, then get that highlight with your loan, because if your home's value continues to increase, then in a year or two, you may find yourself ready to refinance because you are back at the golden 80% combined loan to value. If 1st mortgage rates happen to drop again, then you may find yourself in a great position to ultimately combine both loans together. If the 1st mortgage rates dropped to the 6% zone, and you still plan to live in your home for many years to come then make the move to refinance. It all comes down to what the rate are doing, when the time comes.

Refinance or Second Mortgage? Combining 1st & 2nd Mortgages Together

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Government Mortgage Programs - Fannie Mae Refi-Plus - Is it Worth the Hype? We Think So

Fannie Mae Refinance-Plus Program

The modern housing crisis has left many citizen upside-down in their home value, added to the whole of growing foreclosures; it's become very difficult to get mortgage insurance. In the good old days if you did not have 20% to put down on a home purchase, you could take out a second mortgage so that you did not have to pay mortgage insurance. Mortgage guarnatee associates are going bankrupt while the crisis and the 20% second mortgage selection is practically unattainable. So if your home doesn't have 20% of its value in equity, how do you refinance your home and take benefit of the low mortgage rates? Well, the talk is the Fannie Mae Refinance-plus program which is a government program that is available to citizen who are upside down. So to keep thing straightforward we have a quick breakdown of the pros and cons of the program:

Current Fannie Mae Refi Plus Programs

The Pros:

• You can qualify if your home is upside down in value, up to 105% of the value of the home. For example, if you owe 200,000 on your home, as long as your home value isn't below 0,000 you can qualify
• There is no minimum prestige score, although it is likely there will be mystery getting popular ,favorite if your prestige score is below 580
• Mortgage guarnatee (Mi) is not required on the loan, any way if you currently have (Mi) you must maintain your (Mi) on the new loan
• You can subordinate existing second mortgages, which means you keep the existing second mortgage with your existing lender.

The Cons:

• You can't have a second mortgage and concentrate the two mortgages into one loan.
• If you have mortgage guarnatee you must keep it.
• The appraised value of your home can still conclude the approval.
• Your existing loan must already be with an existing Fannie Mae Lender, otherwise you are ineligible.
• Your prestige score determines the rate you receive.
• Only available for refinance mortgages

All in all we find the Fannie Mae Refinance-Plus to be a good program with lots of benefits for citizen whose home values have dropped. Although there are a lot of determining factors for approval, it's no more difficult that the approval factor with a customary refinance.

For more information on Du Refinance plus in Idaho click the link

Government Mortgage Programs - Fannie Mae Refi-Plus - Is it Worth the Hype? We Think So

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