by FHA Streamline Refinance on November 28, 2009
Owning a home that is worth less than you paid for it is bad. A mortgage with a combined balance or individual balance that is greater than the value of your home only makes matters worse. If this is the case then you have a negative equity mortgage or an upside down mortgage, whichever you prefer.
Most people who have a negative equity mortgage or an upside down mortgage don’t know what to do so often times, they do nothing. If you are looking for ways to reduce your mortgage balance be prepared for some heartache, it’s not going to happen easily. There is no easy way to handle an upside down mortgage so just be patient.
Balance reduction requires leverage and one of the only leverages pieces that homeowners have is the payment they pay to their lender. payments] on time then there is no incentive for the lender to help you. payments] could be an option, but explore this area carefully. Get your lender to work with you and gain some leverage. This is why you hear from many different sources that missing your payments is the only way to get your lender to work with you. If you want leverage, miss some mortgage payments.
Now I can’t tell you to miss your mortgage payment but if you decide to do so you are heading down a path where you begin walking that fine line between foreclosure and homeownership. You just need to know that there is a chance you could lose your home if you can’t generate the desired leverage.
The best chance you have at getting your lender to work with you is to have two mortgages. The second mortgage is more prone to risk and exposure if you were to foreclose on your property. Settlement of your balance is the outcome here if you focus your attention in this area and that is a very good thing. Good news is the lien will disappear but when you charge off the balance it will end up as a collection account in the end.
When you look at refinancing an upside down mortgage you need to look only at the first mortgage only. Look at who insures your loan and who services it, typically who you make your payments to. If it is either Fannie Mae or Freddie Mac you could potentially have the ability to refinance. There are additional guideline and criteria that need to be met but this is a very good opportunity to reduce your interest rate and solidify your mortgage terms.
by FHA Streamline Refinance on November 27, 2009
One of the most popular questions many loan officers are asked in today’s market is:
“Does FHA require a minimum credit score?”
And the official answer to that questions is: No, FHA doesn’t require a minimum credit score – but many lenders do.
Which means you must meet the lender’s minimum credit score requirement if you are going to get them to loan you money even if it is insured by FHA against loss.
About 2 years ago, many lenders started moving toward requiring a minimum mid credit score and at the time the minimum requirement was 580.
Then about 9 months ago, many lenders started moving toward requiring a minimum of 620.
And now, many lenders are moving to requiring a minimum of a 640 credit score before they will loan you money for a FHA insured mortgage.
As you know, FHA doesn’t actually lend you money – they only insure your loan against loss. In the event that you default on your loan, FHA insures your lender against loss. Which means that even though FHA may not have a minimum credit score requirement, if a particular lender has a credit score requirement – it is effectively the same as if FHA was requiring the minimum credit score…
Because unless you meet the minimum credit score, you won’t get an FHA loan from that particular lender.
And the easiest way to get a free credit score analysis is right here.
by FHA Streamline Refinance on November 21, 2009
If you think you can refinance and are facing foreclosure due to your negative equity in your home, think again, there might be hope just yet. There is a government sponsored program called Making Homes Affordable that was set up to help struggling Fannie Mae and Freddie Mac. In order to help those who had a negative equity position in their home the program changed the guidelines to allow for mortgage refinances.
If you didn’t know, Fannie Mae and Freddie Mac were struggling. The real estate market fell apart and they insure mortgages so they struggled. This program has really allowed them to get back on their feet and now it’s the homeowners out there who need an refinance an upside down mortgage that need to take action.
Purchasing, refinancing for cash out or taking a line of credit within the past few years means that you were one of the unlucky ones and more than likely are facing a home with negative equity. This means you home is currently worth less than you owe on your mortgage. You might have taken out an adjustable rate mortgage and its about to adjust and a refinance could really help you keep the payments down. On top of that, interest rates at 5% for mortgage refinances are making homeowners look at refinancing due to the potential savings.
If your current home has negative equity then look for a refinance? Well you might be in luck and get the government’s Government’s program for upside down mortgages to work for you.
Here are some basic rules to negative equity mortgage refinances:
1. The maximum LTV or loan-to-value is 125% of the current value excluding the second or the first only.
2. You may have to qualify with your existing lender depending on your circumstances.
3. If you have two separate lenders the second mortgage company will have to subordinate, or allow the refinance to happen.
4. Refinancing due to negative equity on a loan that currently has mortgage insurance will create an issue for you.
5. You will need to use the loan look up features at Fannie Mae or Freddie Mac’s sites to see if you are actually insured by these mortgage companies.
Those top five reasons should be enough to make you dangerous when attempting to refinance a negative equity mortgage. The process is not exactly easy these days but the outcome will be worth it to you once you see that your payment is lower and life is a little more manageable. Only the most knowledgeable of mortgage professionals can help you through this so choose wisely.
by FHA Streamline Refinance on October 1, 2009
Online mortgages are increasing in popularity each year — and with good reason. There are many great advantages when you use an online mortgage company.
Below are the 6 best.
It’s easy to comparison-shop and research an online mortgage broker. With just a few mouse clicks, you can find out lenders’ interest rates, fees, and policies. Each lender might offer different services and you can certainly feel your way around to get a better idea of how they differentiate. And you can read online mortgage company reviews posted by consumers like yourself.
You can definitely get some better, more aggressive rates. In some cases, online discount mortgage servicesmay also be able to offer you a more competitive interest rate, because they tend to have less overhead than traditional “brick and mortar” banks. In other cases, an independent online mortgage company may have more leeway in negotiating rates and fees.
You can fill out the online mortgage application when it’s convenient for you. With online mortgage lending, there’s no need to sit at someone else’s desk with a stack of papers. At your own convenience, and with your privacy in mind, you can complete the paperwork needed to work through your loan. In some cases, you can even save a partially completed application and come back to it later.
To get the deal closed – you won’t have to travel anywhere or live by the bank’s hours. Do you work long hours? Or do you live outside the city? With an online mortgage lender, these types of concerns can disappear. Even people who are living in the city full-time enjoy the extra convenience of using an online mortgage company.
You can manage your mortgage online. Are your city and state property taxes paid up? Are you current with your hazard insurance? Was the last mortgage payment that you made posted on the actual day it was due? Having real-time access to this information can prevent some hassles down the road.
You can obviously still get the benefits and protection of normal banking. Most online mortgage firms are regulated by the federal government, which sets minimum standards for business and accounting practices.
Still on the fence about using an online discount mortgage company? Call your financial advisor — or your local Better Business Bureau — for advice. A little bit of research could really pay off.
