If someone refinanced their home a few months ago, but lost there job later and can’t afford the home?

Posted on July 5, 2013 by duncan

Question by curious: If someone refinanced their home a few months ago, but lost there job later and can’t afford the home?
On a 1st Mortgage, what does the bank do, if someone refinanced their home afew months ago, but later the Buyer got laid off from work. Buyer can’t afford the house note anymore?

Best answer:

Answer by I Buy And Sell Houses
The owner should contact the bank and ask for either a forebearance or a loan restructuring. Keep the bank informed of your situation.

If you’re unable to pay your mortgage and can’t work something out with the lender, consider a short sale–where you sell the property for less than is owed on it. Otherwise, it’s likely to result in a foreclosure.

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Q&A: Is it possible to buy my own mortgage at a discount?

Posted on July 4, 2013 by duncan

Question by great_and_mighty_adam_levine: Is it possible to buy my own mortgage at a discount?
I have one of those loans that banks don’t want anymore. It’s a 5-year interest-only ARM. However, I bought this on purpose, and have the ability to pay.

My mortgage company just sold my mortgage (not unusual). However, considering the timing and the type of loan it is, I am assuming they sold it at a hefty discount. I’m paying under 4% interest-only payments for five years (I paid a lot of points), and after those five years are up, I have adequate credit and equity to refinance, or I might just have the cash. So, the new mortgage lender can count on under 4% interest for less than 3 years.

My question is, if banks are willing to sell my mortgage at a discount, is there any way for me to buy it? Would it help if I thrashed my credit first?

–>Adam
It seems my question needs clarification.

I would be a fool to payoff this mortgage now at full price. I’m paying under 4%. I calculated the points I paid as yielding a rate of return of 12%, but if I don’t keep the loan a full 5 years, the points were a major rip.

However, if I could buy my mortgage for significantly less than my payoff balance, I would consider it. In today’s market, my mortgage would be sold to another mortgage lender for a BIG discount, so why not sell it to me for a (presumably smaller) discount?

Best answer:

Answer by Pojo
You have already done a couple of bad things, IMHO, by paying points on a interest only loan why futher the irresponsibiltiy by trashing your credit.

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Is buying rental property a good or bad idea?

Posted on July 3, 2013 by duncan

Question by Kirk A: Is buying rental property a good or bad idea?
I was considering refinancing my mortgage and taking an additional 40k out as a down payment to buy a rental house. Is this a good idea? What are the advantages/disadvantages?

Best answer:

Answer by just_my_02c_worth
Well, most people would say that buying property is never a bad idea, however, I once read that Warren Buffet said that if you need to feed it or repair it, then it’s not a good investment. I mean look at all the hidden costs of real estate, maintenance, taxes, water, insurance, utilities, heating equipment, roof, windows, general repairs and upgrades, interest on mortgage, possible government taking by eminent domain, and you can see how any profit would be quickly erased by those expenses (that generally people don’t keep track of).

And don’t forget about tenants who fall in bad times and skip the rent. I would hire a really good investment planner and invest that $ 40K in good, solid investment vehicles such as mutual funds, bonds, and equities that will give you much more return on your investment than a rental property would.

Good luck and have fun.

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Q&A: We have an FHA mortgage at 5.625% Is now a good time to refinance our mortgage?

Posted on July 2, 2013 by duncan

Question by Amy S: We have an FHA mortgage at 5.625% Is now a good time to refinance our mortgage?
I live in Allegheny County in Pittsburgh PA. The ultimate goal is to save money on our mortgage. We have owned our house for almost 5 years. I also hope to roll any closing costs into the mortgage. Any help would be greatly appreciated!!
Thanks!

Best answer:

Answer by Cold
Don’t re-finance unless you can get at least 1.5% cheaper.
Why do you ask?
Closing costs – they are a monster.
It will take you 5 to 7 years just to break even.

Also some people re-fi for a longer term which is a long-term financial mistake.
You just increase the debt you have in your home.
Your goal is to have a home paid off well before your retirement.

Google: Should I re-finance my home calculator
Do about 5 of them and take down notes.
Keep the term of the loan the same – don’t make it another 30 years.
And never consider signing an ARM or 5/5 or 5/1 – banks are still pushing these scam products.
———–
To save money, just make one extra payment towards your principal a year.
This will cut down a mortgage by about 7 years – great savings tool…

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Q&A: What options are available for those of us paying our mortgage but hm is now worth less than the borrowed amt?

Posted on June 30, 2013 by duncan

Question by Krista C: What options are available for those of us paying our mortgage but hm is now worth less than the borrowed amt?
I bought my home 2 years ago for $ 339,000, it was appraised at that time at $ 375,000. Now, only 2 years later it is only worth $ 275,000 according to Zillow.com. My husband and I are doing everything possible to pay the mortgage, cutting back on other things to be able to keep our home. So what government stimilus is available for those of us who are still paying the mortgage on the original home value? Shouldn’t we be able to refinance at the valued home price?

Best answer:

Answer by acermill
Of course not. Why should the lender swallow a $ 64,000 loss just because your home value decreased? That you are struggling to pay the mortgage has no bearing on the current value of the property. Were the property still worth $ 340K, you would STILL be struggling to make the payments.

As well, you might consider that Zillow can be anywhere from very accurate to 40% off on home values. The only way to know what your house is worth is to have it professionally appraised at current market value.

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Q&A: who is going to be awarded the monies from ameriquest settlement?

Posted on June 29, 2013 by duncan

Question by patiently waiting 123: who is going to be awarded the monies from ameriquest settlement?
I had a mortgage with this co and opted to refinance–due to what I believed was bad practices on their part.

Best answer:

Answer by DidYouSearch?
Of the funds earmarked for customers, $ 175 million has been allotted for eligible borrowers who took out mortgages between Jan. 1, 1999, and April 1, 2003. The cutoff date represents when the lender changed loan pricing practices that were misleading consumers, the state officials said.

How much money is due to customers who make claims on loans acquired during that span of time will be determined by each state.

Another $ 120 million in restitution funds has been earmarked to compensate customers who acquired mortgage loans between Jan. 1, 1999, and Dec. 31, 2005. The fund for those claims will be split among the states on the basis of how much money in loans consumers in each state have.

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I need to refinance my 2 homes, but I have a high debt to income ratio. Are there any serious lenders to help?

Posted on June 28, 2013 by duncan

Question by angiemcp2: I need to refinance my 2 homes, but I have a high debt to income ratio. Are there any serious lenders to help?
My credit score is average but not bad. I’m having a hard time trying to refinance my ARM’s into fixed rate mortgages because my debt to income ratio is high. Are there any serious lenders that specialize in these situations?

Best answer:

Answer by kelly
not this day and time

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Can a home loan modification reduce the monthly payment dramatically?

Posted on June 27, 2013 by duncan

Question by MC: Can a home loan modification reduce the monthly payment dramatically?
has anyone had their mortgage loan modify? we pay 1000 a month for our house. is it possible to get it modify to pay 600 or 700 a month? I don’t know if I should keep my house? I think I am paying too much for an old house. when we first got the house we paid 600 a month and then like idiots (did not know any better) we refinance and now we paid 1000. my question is have anyone out there had their loan modify and is it possible to reduce the payments?

Best answer:

Answer by Paul in San Diego
One example of a loan modification I heard of is where the bank reduced the interest rate from 7+ percent to like 5+ percent, they changed the loan from 30 years to 40 years, and they let the owner skip a couple months’ payments. They could still make their money reducing the interest rate, because they stretched out the term to 40 years. This means the owners will pay less to principal each month and more money goes to the bank as interest. And, when they skipped the couple months’ payments, that was added to the principal. So, the bank gets that back when the people sell. They were also prohibited from selling the property for a few years, or else be subject to a significant pre-payment penalty.

How much that actually saved depends on what the original payments were. But, it would have probably been a 30% reduction per month. Not to mention skipping the payments for a couple months to get caught up on other bills.

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Q&A: I refinanced my home. After closing, why didn’t the mortgage company pay my county tax bill?

Posted on June 26, 2013 by duncan

Question by homer simpson: I refinanced my home. After closing, why didn’t the mortgage company pay my county tax bill?
I refinanced my home this year. Part of the closing costs included my bill for county taxes. A month later I received the tax bill. When I contacted the county about it, they said the mortgage company had yet to pay the bill. Will the mortgage company eventually pay the bill? (Possibly at the last possible moment before penalty). Or do they expect me to forward the bill to them? I don’t escrow my taxes and I usually pay early to receive a discount.

Best answer:

Answer by I Love IDOL
If you do not escrow your taxes then you will be responsible for all future tax bills.

The money you paid at closing may have paid to a certain day only.

Call your mortgage company and have them explain where the money went that they already have.

As for the new bills, if not escrowed then you will be paying them. Be on time.

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Why does the Government keep saying we are able to refinance our homes at a low rate of interest, when they?

Posted on June 25, 2013 by duncan

Question by Sandee: Why does the Government keep saying we are able to refinance our homes at a low rate of interest, when they?
have raised the FHA– PMI (mortgage insurance) up so high that the cost of it offsets any advantage to refinancing?

Best answer:

Answer by Art Vandelay
Because some people are still not making the payments, so the losses have to be spread out over the other customers. Very similar to a home insurer; if they have big losses due to a natural disaster, the rates go up on everyone else to offset that cost.

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