Housing Blog

Mortgage activity in Florida could potentially increase if real estates purchases continues to grow as experienced when comparing quarterly real estate purchase volumes in Florida in 2009 to quarterly purchase volumes in Florida in 2008. The Florida Association of Realtors reported a 44% increase in home sales volumes to 43,926 in the fourth quarter of 2009 from 30,610 in the fourth quarter of 2008 and a 93% increase in condominium sales volumes. Homebuyers looking to obtain a mortgage in Florida to purchase a property may find challenges that reflect many existing lenders tightening their requirements and many financing options that existed previously are no longer available.

Those homebuyers in Florida who take the time to understand the mortgage programs being offered could potentially better position themselves to obtain a home loan appropriate for their situation and at better competitive terms. Homebuyers, especially those purchasing a property for the first time, should understand the features associated with conventional versus fha loans, fixed interest rate mortgages versus adjustable mortgages, origination versus discounts, as well as other important aspects of the mortgage being considered. The more informed a homebuyer becomes, the better positioned the homebuyer could potentially become to obtain a mortgage with lower closing costs and a more attractive interest, terms and conditions.

Many lenders have tightened their mortgage guidelines in Florida to reflect the amount of foreclosures, delinquencies, and other situations faced in Florida over the last year. For example, different lenders may have different debt to income ratios required for a homebuyer looking to be approved for a mortgage to purchase a property. Homebuyers could potentially benefit from using a mortgage broker who can help them understand the various programs and options available for specific situations in Florida.

Some of the most common factors contributing towards this situation are loss of job, income reduction, loss at business, sky rocketing prices of the basic commodities, and increasing rate of interest of debts. It is because of the benefits that mortgage refinance loans are becoming famous. Some of these benefits are as follows.

Reduction in the rate of interest:

Earlier the monthly payment was the prime concern of the debtors but now the situations have changed and some people consider rate of interest to be as relevant as the monthly payment. In fact the rate of interest can make a lot of difference on the total money paid to the lender to get rid of the debt. The current mortgage rate makes the debtors to pay a lot more than thought of. Many people seek to refinance mortgage and take the advantage of the reduced mortgage refinance rates.

Reducing mortgage term:

There are some homeowners who like to get rid of the mortgage faster so the equity can be build up quicker. These homeowners would like to shorten the duration of the mortgage. If your income is good and can afford to pay higher monthly payment it is better to increase the monthly payment and get quick riddance from the mortgage. Hiking of the current monthly payment can generate rich dividends in the future in the form of home equity.

Increase mortgage term:

Some people cannot afford the current mortgage monthly payment and could go to any extent to reduce the monthly payment. Usually in this case the monthly payment is reduced but because of the prolonged duration of repayment, the applicable rate of interest increases.

Taking the benefits of the equity:

In some case it is possible that the debtor may have been paying the mortgage monthly payment for a considerable time. Usually the prices of the property appreciate and when major part of the mortgage has been repaid, the increased home equity can be used to generate cash. The process of generating money this way is also called cash out refinance. The debtor can use this cash to serve or get rid of other debts and financial obligations. The rate of interest for refinance home loan is also lower than that applicable for unsecured debts and loans such as credit card debt.

Conversion of mortgage type:

With reference to rate of interest there are two types of mortgages; one is adjustable rate mortgage (ARM) and the other is fixed rate mortgage (FRM). Adjustable rate mortgage (ARM) features reduced monthly payment in the starting years of the term, but as the term advances and especially when there is economic recession the rate of interest hikes, consequently making you pay more than what you may not have thought even in your dreams. When faced with this situation of adjustable rate mortgage (ARM) wherein you have to payments that are not affordable, you would like to reduce the mortgage monthly payments. You can avail home refinance mortgage and convert adjustable rate mortgage (ARM) to fixed rate mortgage (FRM), consequently stopping the rate of interest from wavering and making it predictable and affordable.

Over the past year, the Federal Reserve’s program of purchasing mortgage backed securities has been helping to keep the interest rate for 30 year mortgages down as far as below the 5% level. In fact, interest rates have just begun to creep up from their record low levels; 2009 ended with a bit of an increase on its 15 and 30 year fixed rate mortgages, but the first week of January ended with an unexpected dip in the rates before the anticipated rise is expected to continue.

Many experts are concerned that when the Federal Reserve stops buying mortgage-backed securities then the rates will rebound to the much higher rates that we had seen in previous years. This program is scheduled to cease on March 31st, 2010 unless the Federal Reserve deems it necessary to extend the program.

The Federal Reserve has, in fact, been debating extending the program; much like the government did with the Home Buyer’s tax credit last fall. The tax credit has been a supporting factor in the increase in housing sales over the past year and there were concerns that once it ended that the market would drop as a response. The government decided last fall to continue their tax credit program into the beginning of the year and extend it to April 2010 so that more home buyers could benefit from it and to further support the real estate sector, whose recovery supports the recovery of the economy, after all.

At this point, the Federal Reserve has decided to not extend the securities buying program past the March 31st expiry date, but not all of the members of the December Federal Reserve meeting were siding with this idea. Some members think that the terminating date is too early and may cause some serious increased in the mortgage interest rates. It is a definite possibility that with the removal of this program-and the ending of the tax credit program-that increasing interest rates could squelch the current home buying and cause the market to stagnate and flood with new foreclosures with no one to buy them.

While the government is assuring lenders that with the ending of this program the market will not suffer too much due to them still offering support to Freddie Mac and Fannie Mae, many experts are not convinced. Some economists are concerned that the end of the Federal Reserve program will result in much higher interest rates and help to contribute to another dive in the housing prices across the nation.

A mortgage modification loan is a blessing when it comes to the reduction of your monthly payments. The main objective of these loans that have been introduced by Obama is to prevent you from losing your home and at the same time give you affordable monthly payment rates too. This loan gives you many advantages and this is the reason why you should be aware of it to prevent foreclosure.

In order to get the right mortgage alteration loan for yourself you need to be aware of certain mortgage tips that will help you get access to these loans faster. All these loans have certain formalities and you should always take the aid of a financial adviser who will help you in understanding the terms and the conditions of the loan.

When it comes to the drafting of the mortgage alteration hardship letter you must make it compelling and convincing so that your loan gets approved quickly. The financial statement that you provide with the application must contain details of both the income and the expenditure that has been incurred by you.

All the statements that you provide should be honest and not contain false misrepresentation. The evaluation of these loans application will take time and so you must ask your financial adviser to help you with all the paperwork so that you do not face any problems when it comes to approving the loan.

The above Obama Mortgage tips should always be remembered when it comes to applying for a modification loan.

Chase is one of the many banks that have been getting hurt by people not making good on their mortgages. Like many of the large national banks, they have enlisted the help of the government to get over this problem. The issue for Chase has been foreclosure and people just losing control of their loans. So what are they doing to help with this? They are offering a loan modification program that makes a lot of sense. They are helping people get back in control of their payments, and it is now easier and more beneficial than ever before.

The new Chase loan modification program is in line with what President Obama has been looking for out of the banks. He has urged banks to do their part to help people stay in their primary homes. The process has become easier because of this government help and the fact that the process is much more streamlined. Because so many people are seeking loan modification now, banks like Chase have been forced to up their staff in charge of handling such issues. This means that they are waiting and ready for you to bring your modification case to them.

So how does modification through a company like Chase actually work? If you are paying a large amount of your monthly income to Chase – in excess of 37% – then you are likely eligible for some help. It should be noted that you must have suffered some financial stress, as that is a key element of the eligibility. If you have lost your job or your spouse, have suffered an injury, or you have seen your finances crumble in some other way, then perhaps you can get up with Chase and have them work on a new loan plan that makes sense for your current life.

What they will do is work with you to bring down your loan payment in some form or fashion. Perhaps this will mean lowering the amount of interest that you pay. It might even mean extending out your loan so that you are paying less right now and more on the back end. Whatever the case, you will find that modifying your loan gets you back on top of things and most importantly, it keeps you in your home. It is easy to get involved if you meet the criteria, so doing that is key.

Homeowners that find themselves facing difficult economic times are apt to make rash decisions, but it’s important for consumers to understand that they need to take their time when dealing with something as drastic as a foreclosure proceeding. Many struggling individuals must choose between filing bankruptcy and pursuing some type of home loan modification program and it is important to compare and contrast the two options. An excellent way to compare these is to understand the different impacts they will pose on a credit rating and other long term effects.

It is critical that consumers realize that a bankruptcy is not going to stop legal filings, rather it will simply delay the inevitable and allow an individual to procrastinate. There simply is no way that going bankrupt is going to provide freedom from a mortgage. The majority of individuals who opt for this method of dealing with the problem mistakenly believe that they might get to keep their home, and the unfortunate truth is that the entire process will only allow them to stay a little bit longer. A mortgage loan mod, on the other hand, is a more permanent solution and will help a person make arrangements to keep their residence by designing a monthly payment that is easier to afford given the current financial circumstances.

Another major difference between bankruptcy and a home loan modification is the impact to a credit score and financial history. The negative effects of seeking total relief from all outstanding obligations is going to exist for seven to ten years and will make it very difficult to obtain new loans or apply for credit in the future. Modifying a mortgage will not cause the same harm to a person’s credit rating and can actually help build a foundation for the consumer to rebuild their solid financial picture upon. Future lenders are not going to treat individuals that have pursued some sort of loan modifying program in the same way as individuals that have taken the easy way out.

Few people want to lose their home and have to move, so it only makes sense that consumers should contact a professional to seek advice. When dealing with something as important as living arrangements and credit standings, it should not be a guessing game. Bankruptcy is a drastic measure that will have severe repercussions, but a home loan modification could be the answer to a struggling homeowner’s prayers.

Millions of Americans are finding it harder and harder to pay their mortgages each month. The economy is in shambles are people starting to lose their homes due to job loss and loss of income. However, there is a government program that has been developed to give homeowners the break they deserve. Obama’s MHA loan modification program will allow homeowners to refinance their mortgages to make payments easier and forgo foreclosure.

This loan modification plan is a great way for people in dire need to lower their monthly payments and lower the current interest rate on their mortgage. But there are certain qualifications that you must meet in order to take advantage of this plan. The money that you owe toward your home must be lower than or equal to seven hundred thirty thousand dollars. If you owe more money on your home than that, you will not be able to qualify for this plan.

Your home has to be your primary residence. If the mortgage you are trying to refinance is not your primary residence, you may not be able to qualify for this modification program. One of the biggest qualifications that can make you stand out from the crowd is if you have experienced a job loss or a loss of income since you bought your home. This financial hardship could be due to a lay off or a job that has cut your hours or pay. This could also be due to medical bills or extreme debts. Another big factor is if your mortgage is more than thirty one percent of the money that you make in one month.

To apply for this plan, you will need all of your previous tax information and income information. You need pay stubs, income tax returns, and copies of all of your debt. When you have all of this information together, you should contact your lender and let them know that you want to apply for the loan modification program. They will be happy to help you apply. Watching your home go into foreclosure is a nightmare for any homeowner. Do not let your house fall away from you because you did not take advantage of this new plan. Get all of your information together and act as fast as you can. You can save your home and get your feet back under you with a phone call to your lender.

After the lack of success with the Home Affordable Modification program, the Obama Administration has decided to implement a new plan. With only 170,000 homeowners out of 1.1 million completing the HAMP program, the Administration had to find a new strategy to combat the mounting number of foreclosures in the U.S. With this plan, the goal is to help struggling homeowners pay their mortgages and prevent foreclosures by refinancing with FHA mortgages.

How the New Program Will Work

This program was designed to aid homeowners with underwater mortgages and unemployed homeowners who need assistance making their mortgage payments. Approximately 1 out of 3 homeowners have underwater mortgages, which means they owe more than their homes are worth. Economist Mark Zandi estimates that about 4.5 million homeowners have homes that are in foreclosure or have mortgage payments that are at least 90 days delinquent. Add unemployment to the mix and this issue becomes even more problematic as homeowners struggle to pay their mortgages with less income.

Homeowners do not have to have an FHA mortgage to participate in the program, but they will be required to refinance their current mortgage with an FHA mortgage. A homeowner must owe at least 15% more than the value of his or her home in order to qualify for the program. Homeowners must also be current on their mortgages, which cannot have a balance higher than $729,750, and their credit scores cannot be lower than 500.

Unemployed homeowners can have their mortgage payments lowered to 31% of their monthly incomes (at the most) for three to six months. To do this, they must show proof of their unemployment benefits, and they cannot have more than three missed mortgage payments. Their loans also must have been originated before January 1, 2009.

In order to qualify for this refinance, the homeowner must get his or her principal balance reduced by at least 10%. Incentives (specifics are unknown at this time) will be offered to mortgage lenders to encourage them to reduce borrowers’ principal balances.

What the Program Hopes to Accomplish

This program will be financed with $14 billion of the Troubled Asset Relief Program funds. Not all homeowners in danger of foreclosure will qualify, including homeowners who took on mortgages beyond their financial means. While not everyone can be helped, the program is intended to help about three to four million homeowners avoid foreclosure on their homes. Lowering the percentage of home foreclosures could prevent home prices from decreasing further and be a start toward rebuilding the housing market in this troubled economy.

Some wonder if using FHA-backed mortgages to refinance troubled mortgages is the best answer to prevent foreclosure. The FHA program is already struggling, as made evident by its announcement of the upcoming increases to the down payment and mortgage insurance requirements. Taking on more troubled mortgages could hurt the program more, but only time will tell. For struggling homeowners, this could be the best solution to help them manage their debt. Hopefully, this version of the program will have more success than its predecessor.

Mortgage rates are at historic lows right now and many people are taking advantage of it and either purchasing a new property or refinancing their current properties. In order to protect yourself and make sure you do not get ripped off by unscrupulous agents, you need to educate yourself on a few things.

How Does Your Loan Officer Work?

You need to know how many loan officers work as well as how lenders work as well.

Greed is the root of so many problems and it can also be a driving factor that is preventing you from getting the rate that you really should be getting without having to pay extra.

It might seem that the whole process is complicated, but if you know the right questions to ask and some basic information on the process, then you will be well on your way to protecting yourself from people that just want your money.

What Lenders Send To Loan Officers Daily

To begin, each and every day loan officers will get the available mortgage rates available for that day on what is called a rate sheet. This sheet will contain the par percentage which is the number you will get without paying extra and that will not give any perks to the broker either. The other numbers on that sheet will tell the officer what he or she will make if they give you a higher interest as well as what it would cost you to buy a lower interest. The money they get back is called a rebate from the lender and it is to encourage the selling of mortgages that are worth more to the banks. You should be getting this rebate back, but some people will not let you know about it and just keep it themselves.

Interest Rate Basis

Since most lenders base their percentages on the 10 year treasury bond, if you keep an eye on this, you will have a good idea on what you should be offered on any particular day. This way if they quote you a fairly high number, you can come back at them with what you know. Of course, if this happens, you might be better off shopping around for other brokers.

Disclosure Laws

One important consideration is the fact that while pure brokers are required by law in Denver to show you the mortgage rates when you go see them, some may quickly gloss over the item hoping you will not catch it. On the other side, if you are dealing with an agent that works directly with the people that will be giving you the loan, they are not required at all to reveal the rebate. It will not even show on the Good Faith Estimate nor on the final closing settlement.

There are many reasons why a person can end up with bad or poor credit ratings. Making late or partial mortgage payments, missing out on the payments altogether for some months, outstanding debts, unexpected or unplanned expenses can be some of the reasons which can result into bad credit ratings. People end up with bad credit scores primarily because they cannot keep up their financial commitments, and it is this category of individuals who need credit facilities the most.

That is where the main issue lies – lenders prefer lending mortgage capital to borrowers who have excellent or good credit ratings since they are sure to pay off what they owe, and even offer higher credit limits to the borrowers irrespective of their requirements. Since it is the credit score that determines whether a person is going to get the required credit facilities, and if so up to what limit, it is important to repair the credit scores. The loan applicant may have to wait for some months after going in for a credit repair program, as these kinds of programs involve making regular and timely payments over a period of time. So if the borrower had bad credit ratings and wants to avail a more affordable monthly repayment schedule, going in for bad credit mortgage refinance might be the best choice.

Refinancing your existing mortgage with bad credit ratings

Refinancing an existing mortgage can provide many advantages, and if done in a proper manner, it can really improve the debtor’s financial condition and credit status. It is possible to release some equity through refinancing. Home values appreciate over the years, and by carrying out a new mortgage valuation, it is possible to increase the credit limit associated with the existing mortgage and avail some equity in the process. Refinancing can be done with your current mortgage loan provider if he or she supports the facility. Alternately, other mortgage refinancing can be approached for affordable home refinance loans. The main difference between a normal or standard refinancing and a bad credit refinancing is that in case of bad or poor credit refinancing, the rate of interest charged is more, and the terms and conditions of the refinance are more stringent.

This is because bad credit indicates a certain risk factor of possible loan defaults in the future, and the loan provider desires to recover the capital lent as quickly as possible. Home mortgage refinance loans are specialized refinance programs, and have to be tailored to be effective. To take the optimum advantage from the refinancing of your existing mortgage, it is imperative you find a lender who is co-operative and supports you in the long run by keeping a lenient attitude towards the recovery of monthly payments, and providing you with the correct advice if you face financial problems in the future. Many loan providers and credit institutes offer home mortgage refinance loans, and even with a bad credit rating, it is not that difficult to find a lender who can support you. You just need to organize yourself and tackle your requirements in a predefined and logical manner.

Finding a bad credit mortgage refinance lender

Contrary to what the majority of the people believe, it is not that difficult to find a loan provider who supports mortgage refinance for bad credit ratings. It is possible to find such a lender the standard or orthodox way by looking up the newspapers and financial magazines and responding to the advertisements. One can also call up friends and relatives who have availed the refinancing facilities, and find out how effective the refinancing turned out to be for them, and up to what extent the lender supported them in their difficult times. It is a good way of engaging with a loan provider since you know about the lender’s background, and what to expect from the lender in the future.

Another way to go about refinancing your mortgage with bad credit ratings is to search online on the internet. Almost all lenders have an online presence, and advertise their loan products on their websites. The product specifics such as interest rates, loan term, monthly repayment amount, etc. associated with the loan facilities are clearly mentioned so you end up saving a lot of time in your search for your lender. You select the lender who offers affordable rates. Many websites also offer a loan calculator and using that it becomes very easy to calculate what kind of interest amount you are likely to pay over the loan term depending upon your monthly repayment amount.

Once you select the lenders, you need to fill up an online application form and provide your contact details so the lenders can call you. It is important that the quote you get from the lender is non-binding i.e. you are not forced to go ahead with the lender once you fill up the form. Generally the marketing executives call up within 24 hours, so be prepared to receive a call from the loan provider. It is recommended you negotiate with the lender and further reduce the interest rates and avail affordable terms and conditions. It is not that difficult to refinance home with bad credit if you are organized in your approach.

It is not that difficult to get mortgage refinance with bad credit if you know the refinance process and how to get the most out of it. The article explains how to acquire your mortgage refinance if you have bad credit ratings.