Loans by Zach

A rising number of homeowners are defaulting on their mortgages and facing foreclosure or loss mitigation as the economy continues to decline. Homeowners who are unable to make their monthly mortgage payment for whatever reason have options that will allow them to stay in their homes. Even though many situations like these end in foreclosure and a ruined credit score, it doesn’t necessarily have to turn out that way.

Mortgage Modification, also call Loan Modification can help homeowners stay in their home and continue to make their monthly payments. A loan modification is a change in the terms of the loan which will allow it to be reinstated with lower payments and possibly lower interest so that the borrower can afford to keep their home. If you find yourself in a situation where you can no longer afford your mortgage, it may seem like there is no hope to saving your home, but MOST people do qualify for a loan modification.

A mortgage modification, which is a lot like a refinance loan, is when homeowners refinance their current mortgage to get a better interest rate to lower their monthly payment. No matter what the reasons might be, if you are about to default on your home loan it is important to consider loan modification to save your home.

Loan modification is not the same as debt consolidation or refinancing a mortgage before you begin to fall behind. A mortgage modification is a long term solution sought after a homeowner is no longer able to make their monthly mortgage payments. Rising interest rates, job loss, or other events preventing a homeowner from making their payments on time is when a loan modification is used to keep them in their home.

Loan modification may change the loan’s term length, interest rate, and/or other factors to keep mortgage payment affordable for the borrower. There may also be expenses and fees can be included in a new loan modification and paid off in affordable monthly payments. Besides being allowed to stay in their home, a loan modification also saves the homeowner’s credit from the negative affects of a foreclosure.

If you are looking for loss mitigation or a loan modification in California, or anywhere else to save your home there are many resources for you to choose from. With the solutions of loan modification and loss mitigation available, as well as other routes, foreclosure should always be the last resort.

Why Foreclosure Should Be Your Last Resort
By Dustin Rohde

Lowest mortgage rates are the number one selling point for just about every mortgage company. You will never hear a mortgage company say “our rates are ok”.

Your number one objective is to get the lowest mortgage rates. So, why is this so hard? You want low rates and mortgage companies have low rates (according to them) so what is the problem?

The problem is the lowest mortgage rates for one company are not the same as the lowest for another. And the lowest mortgage rates you can get for your situation are not the same as the lowest someone else can get.

So, it becomes a little daunting.

Lowest Fixed Mortgage Rates Different

The first thing a low rate depends on is where the mortgage company gets their money. That is called a wholesale lender. Every mortgage company you talk to will have to get their money and therefore their rates from a wholesale source. Even the big companies and banks have a wholesale division.

The wholesale cost for the money is different for every wholesale lender. If they want to make a bigger spread off the rate, then their rates will be higher. That means the mortgage company using them will have higher rates.

You will not be able to pick your own wholesale lender obviously. But now you know why rates are so different. The source of the rates are different.

Lowest Refinance Mortgage Rates

The second thing a low rate depends on is how much the retail mortgage company is making off the rate. The wholesale side makes money off the rate and the retail side also makes money off the rate. The retail side is the originating mortgage company you deal with and that includes banks and brokers.

The money a broker makes off increasing the rate is yield spread premium and for a bank it is called service release premium. Lowest mortgage rates depend on how much that company is going to make. The lower the rate, the less they make.

The lowest mortgage rates also depend on what other costs you pay. If you are not paying an origination fee, the mortgage company will increase your rate to pay that in addition to the money they already were making off the increased rate.

To get the lowest mortgage rates, you have to pay all your costs including the origination fee. Many mortgage companies do not have an origination fee in their estimate because that can be a really big number.

When you see your mortgage loan amount is increasing by thousands of dollars for the origination fee, you freak out. But if you want the lowest rate, you have to pay the costs upfront.

It does not sound very exciting does it? But that is how it works.

Compare Best Mortgage Deals

The third thing a low rate depends on is your own situation. When you are planning on refinancing, there is no shortage of rates splashed everywhere. But these days, mortgage rates are very specific to your situation. The rate someone advertises will probably not be the rate you end up with because there are so many variables.

When you compare mortgage rates, you have to give these companies quite a few pieces of data so they can give you an accurate quote. We have a rate quote service and yes there are quite a few questions on it. But every question is imperative to getting the right rate quote.

And speaking of rate quote services, it makes a difference which one you use. For example, Lending Tree had a class action lawsuit filed against them because they claimed you would get offers from different companies. In reality, you got offers from companies they owned.

You thought you were shopping to get the lowest mortgage rates but it is not shopping if they are all the same company. Other websites also make it look like you are shopping but it still is going to only one company.

With our system, you get 4 quotes from different companies and we do not own any part of any of them. So, we have no vested interest in sending you to a specific company.

One last thing to consider when you compare mortgage rates. There is an add on for credit score, equity position, and loan purpose. An add on can be paid upfront as part of your closing costs or the rate can be increased to pay for it.

Most companies just increase the rate to pay the add ons without telling you about it. If you want the lowest mortgage rates, you will have to ask the originator what add ons you have according to your situation. Then you have to pay them upfront and not use the rate to pay them. Ok one more last thing. These three things also apply to getting the lowest FHA mortgage rates too.

When you decide on a company, read our post on the rate lock portion. Anyone can verbally tell you a rate or slap one on an estimate but locking is another matter entirely. The only way you get the lowest mortgage rates is if you actually lock them in.

Lowest Mortgage Rates: Three Vital Factors
By Terri Ewing

Buying a new home is all about priorities. When the members of your household agree on buying a family home, you further ideally arrive at a compromise to earn more, spend less, and save as much as you can together. Priorities are all about redefining your lifestyle and defining what your family desires in a home as a whole. One of the first items you have to define well is the possible location of your new house.

Setting your sights

When a family grows in size and number with the welcome addition of new family members, adjustments definitely have to be made in your living conditions like the size of your house, the number of rooms, and the facilities available inside it. Facilities outside of it, like those for hobbies like sports and gardening or those for essentials like parking and transportation also have to be reconsidered.

Just as any family evolves, your priorities in a home also change and develop, hopefully, for the better. You could be at the very exciting phase of setting your sights on possible locations for a new family home. You are expanding your horizons by widening your reach to those dream locations while narrowing down your choice to some possible ones.

Getting more insights

Finding a new home unassisted could make you go through so many random trips of sightseeing and scouting around, especially when you have no idea what they cost and what features you should be asking about. At first it could be fun, but after a series of futile and directionless searches, you could end up frustrated and exhausted. Your time and energy are also a family priority, so you might as well consult professional help from an efficient real estate agent.

A good real estate agent would quickly pick up some insights on the type of home which you obviously want, the design and style that would work best for you, and the location which suits your family’s needs. He could work closely with you on what each would cost compared to what you can afford with your current finances.

A good real estate agent knows your priorities and will always stay by it. He respects the priorities you define and will deliver by those standards. With his assistance, you could find the best possible location which you and your family can truly call home.

The Importance of Location in Your Priorities as a Home Buyer
By Rose

Selling your house is going to be a good help for you financially. However, it is not going to be a good financial worth as it is a second hand property. Because of this, you can sell it at a very cheap price compared to the original.

However, you can still increase the value of your home by doing some minor repairs on the house. This is for the reason that you the house is going to look presentable among the buyers and will be convinced that your house should cost more than what it has to be. Here are some simple repairs that you can do in the house, especially at the exterior part of the house.

Roof. What you can do is to check your roof for some holes. Once you have found that there are some holes, and then you can fix those by putting placing some sealants. If you have noticed that the roof is also losing its vibrant color, you can get a waterproof paint and repaint it. In this way, you are not only making it convenient for the buyer but will also add value for the house.

Flower boxes. If the house has flower boxes, it is better if these are going to be repainted if they are faded. These will surely add value to your house especially if the buyer loves plants and flowers.

Walls. You can do two things on the wall. First of all, you can check if there are some cracks caused by placing nails or because of other reasons, you can put again some wall sealants. Doing this will surely hide the cracks and give your house a total make over. At the same time, you may also want to repaint the walls for added aesthetic value.

Hinges. If you think that hinges are not important in adding value to your home then you are wrong. Keep in mind that you want to make sure that the buyer will perceive your house as a functional house. By fixing door hinges, your home can give a feeling to your home as if it is a brand new house and will be agreeable in paying more for your home.

Knobs and handles. Just like in hinges, you want let the buyer feel that the house works like it is brand new. By putting functional door knobs and kitchen cabinet hinges, you will let the customer know that your house is a good buy and really a value for their money.

Keep in mind that when it comes to real estate, face value and its functionality matters. So better add more face value to your property now so you will gain more profit in selling your house than what it should only cost.

Adding Value To Your Property Through Simple Repairs
By Maria

Foreclosure and short-sell deals can get you into a home on the cheap. Are you prepared for a potentially convoluted transaction?

As the inventory of foreclosed homes on the market piles up, you might be tempted to jump in and get yourself a great deal on some real estate. That’s a realistic proposition-as long as you know how to avoid getting burned on a foreclosure purchase.

In the best-case scenario, buying a foreclosure or short-sell home is a win/win situation: you get the property for a nice price, and the former owner and lender can cut their losses and move on. Unfortunately, these transactions don’t always turn out that way. If you aren’t adequately prepared for your distressed property purchase, you may end up wishing you’d never gotten involved.
Get prequalified for purchase mortgage

Before you fall in love with the foreclosure on the corner, talk to a few lenders about financing. Obtaining a purchase mortgage is more difficult than it used to be, so start this process early. Get prequalified, and evaluate the affordability of your purchase mortgage payments, as well as taxes and insurance. Quiz prospective lenders on how to streamline your purchase mortgage approval.
Skip the auction

Buying at an auction limits your ability to inspect the home, and generally requires you to pay in cash. Inexperienced homebuyers should generally avoid the foreclosure auction. Limit yourself to buying a distressed home before the auction in a short-sell transaction, or after the auction when it’s a bank-owned property.
Inspect with an expert

Foreclosures are often beat up. The former homeowner may have sabotaged the property out of frustration, or the home may have been vandalized after it had been vacated. To minimize the chances of getting caught off guard with huge repair bills, bring a contractor with you to inspect the home. Get an estimate of potential repair costs before you sign a contract”>purchase contract.
Take a walk

Don’t make the mistake of focusing so much on the home that you forget to inspect the neighborhood. The housing crisis has changed the character of some areas, particularly those that have a high percentage of foreclosed properties. Problems with vandalism, homelessness, and gangs are things that you want to know about before you buy. Take a few walks around prospective neighborhoods at various times of the day. Assess the quality of surrounding homes and talk to the residents.

You won’t have a problem finding foreclosure deals, but you might have a problem finding the right one. In this real estate market, it pays to be patient. It’s not so easy, after all, to undo a rash purchase decision. You’d have to put the home back on the market and try to sell it off quickly. That scenario virtually guarantees that you’ll get burned financially, because you won’t be able to recoup closing costs and sales commissions in your asking price.

Helpful Hints for Buying a Foreclosure
By Catherine Brock

When you are looking at how to successfully refinance things may seem very complicated and confusing, but it really is a lot simpler when broken down. To make this work well you just need some planning with a calculator, pencil, and paper.

The first thing to understand is that refinancing means to finance again. You are getting a completely new loan, which you pay off your current one with, and then just start making payments on your new loan.

If your loan is anything other than a mortgage things are really simple for you! Find a lower interest rate, or terms that suit you better, and take them.

For a mortgage things are a little more complicated. So, how to successfully refinance?

When you got your original mortgage you probably remember all of the opening costs, the appraisal fees, the insurance, etc. All of these things will have to be done again. On top of this, you will have fees to close your current loan. Check your loan terms to see if you have a fee for closing out your loan early as this can be a real problem. You want to try your best to add up all of your initial opening costs. For a general estimate many say to expect to pay 3-6% of the new loan amount plus any prepayment penalties on your old one. So, why would you want to do this with all of these upfront costs? Let’s look at what you can save.

As a general rule of thumb it will probably be worth it if you can find a two percent lower interest rate. When you find this lower rate you want to break out your calculator. See how much this rate will save you each month and then figure out how long until you’ve started saving more money each month than you initially spent on opening costs. Will you still be living in the house at that time? Many people estimate this takes three years on average.

Now you know the simple secrets. If you break it down and add all the numbers together you’ll know how to successfully refinance.

How to Successfully Refinance
By Jennifer Quilter

Your credit rating can help determine whether you get a loan and what interest rate you pay, so getting your score as high as possible can save you big bucks.

The difference in interest rates for mortgage loans is nothing to sneeze at. Someone with a FICO score, or credit rating, of 760 to 850 could pay $188 less per month on a $216,000 30-year fixed-rate mortgage than someone with a score of under 658, according to MyFICO.com. The amounts are based on interest rates of 5.99 percent for the higher rating and 7.31 percent for the lower rating.

Credit scores are grouped into five basic categories, according to MyFICO.com. In general, about 35 percent of the score is based on your payment history, about 30 percent on how much you owe, 15 percent on the length of your credit history, 10 percent on new credit and 10 percent on types of credit used. The mix can vary depending on your situation.

Credit ratings evolve over years, but there are ways to raise your credit score a few points at a time.

Pay your bills on time.
“I’m not sure a lot of people understand that,” said Jack Guttentag, professor of finance emeritus at the Wharton School at the University of Pennsylvania and the man behind The Mortgage Professor Web site (mtgprofessor.com). “They always say, ‘I always pay it eventually.’ ”

Pay more than the minimum on your credit cards every month.
Your score could go up a few points as your credit card balances go down. Just a few larger payments can help if you previously were paying the minimum.

Limit the number of new credit-card accounts you open.
An exception is for people who are trying to re-establish credit after a bankruptcy or other financial crisis, according to MyFICO.com. “Opening new accounts responsibly and paying them off on time will raise your score in the long term,” says the Web site, which is published by Fair Isaac, the company that invented the FICO score.

Keep your balance well below the credit limit on revolving accounts like credit cards.
Your credit score will likely be higher if you have small balances on four or five credit cards (as an example) than larger balances on two or three cards, especially if the balances are close to the credit limits, Guttentag said.

Pay off any uncollected items.
Your credit score is being hurt if you’re withholding payment because of a dispute with the lender, no matter how “right” you are.

And finally, always remember that paying down your revolving credit, or credit cards, is the best way to improve the portion of your credit score that looks at how much you owe.

There’s no doubt about it: Lenders have tightened the guidelines they use to evaluate loan applications. That means borrowers who want to refinance their mortgage to take advantage of low interest rates may wonder whether they will qualify for a new loan. This summary should help you understand what lenders look for when they evaluate mortgage refinance applications:

How much you make and how much you owe
Lenders weigh your monthly income and debt payments through a debt-to-income (DTI) ratio. Conventional wisdom is that lenders look for a DTI that’s no more than 38 percent. However, some programs are more flexible and allow a larger DTI ratio.

DTI is a complicated calculation, so you should discuss your income, debts and housing costs with at least a few lenders to determine if you’ll qualify to refinance your mortgage. If you have a high debt-to-income ratio, you may want to concentrate on paying off some of your debts prior to refinancing.

Also keep in mind that most lenders will require that you document your income with recent paycheck stubs, W-2 Forms or federal income tax returns.

How much you want to borrow and how mch your home is worth
Another factor that contributes to whether you can qualify for a mortgage refinance is your loan-to value (LTV) ratio. To calculate your loan-to-value ratio, divide the amount you want to borrow by the current value of your home. For example, if your home is worth $250,000 and you want to borrow $210,000, your LTV is 84 percent.

Most lenders look for a loan-to-value ratio of less than 80 percent to refinance. However, again, some loan programs are more flexible.

One example is the new Making Home Affordable program, which allows refinancing with up to 105 percent LTV. This program is open to borrowers who have a good track record of making their mortgage payments and whose loan is owned or backed by Fannie Mae or Freddie Mac.

A second example is the streamlined refinancing program offered by the Federal Housing Administration (FHA), which doesn’t require an appraisal. This program is open to borrowers who have an FHA-insured loan.

Have you paid your bills?
Your credit score also can be an important factor in your ability to qualify to refinance your mortgage. While there is no specific minimum credit score that you’ll need to refinance, keep in mind that if your credit is impaired, the interest rate and terms you’ll be offered might not make refinancing an attractive option. If you have a strong credit score (and a good track record of paying your bills on time), you’ll likely be offered a lower interest rate and better terms.

Remember, lenders will look at a combination of the factors mentioned above —your debt-to-income ratio, loan-to-value ratio, and credit history—along with other aspects of your financial situation to determine whether you’ll qualify to refinance your mortgage. Either way, it is best to speak directly with a lender or multiple lenders to determine your options. You can get no-obligation rates and offers from multiple lenders through LendingTree.

Also keep in mind, if you do qualify to refinance, you should still consider whether refinancing makes sense for you.

Qualifying to refinance your mortgage
By LendingTree

Home buyers can choose from many different types of mortgages. The basic models are fixed rate mortgages and adjustable rate mortgages or ARMs. More choice is created when lenders vary the term of the loan, the way the principal amount you owe is paid off or amortized, or add features such as a conversion option or prepayment privilege.

“In addition to the traditional 30-year fixed rate mortgage, there are dozens of mortgage loan products available, from adjustable rate mortgages to interest-only and negative amortization loans,” says LendingTree Chief Consumer Officer Ed Powell.

The factors you should take into account when choosing your mortgage include:

* What you can afford to pay each month based on your current income.
* Whether you expect your income to rise, fall or stay the same over time.
* Whether you plan to stay in the house long-term or move in a few years.
* Your tolerance for risk.
* Whether you expect interest rates to rise, fall or stay about the same.

Taken together, these factors narrow the range of mortgages that you should consider.

Take this scenario: you and your partner both earn good money and expect your salaries to rise. You plan to move in three to five years and expect interest rates to stay about the same or even fall during that period.

Under these circumstances, you might choose a fully amortized five-year ARM or fixed rate loan with pre-payment options.

A five-year mortgage is a good choice because the term matches the length of time you expect to own the house. If you sell after three years, your early redemption penalty will be minimal. If you decide not to move, you can refinance when the mortgage matures.

A fully amortized loan with prepayment options allows you to pay down the principal amount you owe and build equity quickly – a good idea for anyone who can afford it.

An adjustable rate loan might suit you if you are confident that interest rates are on their way down. But if you don’t like taking any risks, you’ll probably want to protect yourself against the possibility that rates will increase by taking a fixed rate loan.

Here’s another, quite different, scenario that leads to a different mortgage choice: your income is low and/or fixed. You plan to stay in your home for many years, and expect interest rates to rise.

You will likely choose a traditional 30-year fixed rate mortgage. The 30-year term and fixed rate allow you to lock in affordable monthly principal and interest payments for the long term. You know your installments will be manageable, and you will be chipping away at the principal of the loan and building equity slowly but steadily.

With all the options available, there’s bound to be a mortgage that suits you and your situation. Powell suggests you talk to a loan officer at your bank about the choices. “Taking the time to learn about the process is worth it, because you’ll be a better advocate for yourself,” he says.

Finding the best mortgage for you
By LendingTree

Buying a first home can feel intimidating. However, by understanding the process, you can have a great experience buying your first home.

1. Begin the loan process.
One of the first steps in buying a home is finding out how much you can afford. Lenders call this prequalification, because they determine roughly for how much of a mortgage you qualify. To get prequalified, you contact a lender and provide basic financial information, such as your credit history, income, assets, etc. The lender then determines roughly how much of a loan you are qualified for. You can also get prequalified through LendingTree. Prequalification is not binding, however. The next step is to get preapproved, which occurs when the lender verifies your financial information. By getting prequalified and preapproved, you are in a better position to shop for your first home.

2. Find a REALTOR.
Once the mortgage process is started, you are now ready to contact a REALTOR. They can help you to find the right community and the home that best meets your needs. To find the best REALTOR to help you buy your first home, get recommendations from people you know, or you can search online.

3. Find your home.
Now that you have a REALTOR, the next step is to start your property search. Allow plenty of time to look at as many homes as you can so you can find the perfect first home. When you find the house you would like to buy, the next step is to make an offer. Your REALTOR assists with the paperwork and helps you make an offer that the seller may accept.

4. Get a home inspection.
Once the owner accepts your offer, you now have a contract on your first home. But the process isn’t over yet. You must arrange a home inspection to make sure there are no problems with the house. The inspector will provide you with a list of potential problems that you can ask the seller to fix. You and the seller then negotiate on what needs to be fixed before closing on your first home.

5. Moving arrangements.
The next step is to make moving arrangements. Whether you are moving yourself or hiring a moving company, you should set this up in advance. If you plan to move yourself, get boxes and rent a moving truck to transport your possessions to your first home. If you plan to hire movers, call them well in advance so that they can be scheduled for the day that you need them to move into your first home.

6. Arrange homeowner’s insurance.
You need to have homeowner’s insurance on your first home. Start by calling your insurance agent. Your agent will ask you questions regarding your home, such as the address, square footage, type of roof, number of bathrooms, etc. The agent gives you a quote and then coordinates with your lender. At closing, you pay the premium as part of your closing costs.

7. Packing.
Now it is time to start packing! A great way to get started is to go one room at a time. Start with a room that is used the least in your current residence and start packing there. This is also a great opportunity to get rid of anything that you no longer want. You don’t want to move anything that you do not need, so if there is something that needs to be thrown away or donated, now is the time to do that.

8. Address change and utilities.
You will want your mail to arrive at your first home, so don’t forget to change your address with the post office. This can now be conveniently done online. Also, it is necessary to have the water, electricity, gas, cable, etc. turned on in time for your move-in day.

9. Walk-through.
Prior to possessing your first home, you have a walk-through. This is a chance for you to make sure that everything from the inspection was fixed. It is also a chance to see that your first home is in move-in condition.

10. Closing and move.
The final step in the process of buying your first home is closing and then actually moving in. At closing, you sign the papers from the lender and any others that the state requires that make the home yours. You will also have to pay closing costs. Once the paperwork is done and your check is signed, you can move your possessions in to your first home. After weeks of preparation, the house is now yours.

Buying your first home
By LendingTree