John H. Drake asked:




As the editor of a popular home loan information site I am being asked a lot lately about how to get a home loan modified and for mortgage loan modification advice in general.

Well, it’s simply a fact of the times the mortgage industry has changed and stated income loans requirements simply don’t exist like they used to. In today’s mortgage market, you as the borrower will be required to present full documentation of your income and your assets and you will be forced to qualify based upon much stricter standards such as traditional debt to income ratio calculators.

It is these changes in the housing industry that have affected housing prices so dramatically in recent years, particularly in expensive areas such as Florida and California. It works like this; many people bought homes they couldn’t afford with adjustable rate mortgages and stated income loans. Many of those buyers have since gone in to foreclosure. This caused a collapse in the mortgage industry which then lead to stricter standards for getting home loans, and that in turn led to a lack of eligible buyers in markets where home prices have been artificially driven up because of the previously questionably approval process by mortgage lenders. This in turn is driving the price of home down.

If you are facing a foreclosure one thing you can do is to contact an attorney who specializes in foreclosures and loan modifications. But perhaps the best thing to do if you are facing foreclosure is to use a loan modification company. A loan modification company should have an attorney on staff and will know exactly what to do to help you avoid foreclosure – not to mention a ruined credit score. By getting a loan modification and reducing your interest rate to a level you are able to afford you may be able to stay in your home and in some instances even reduce your principle with a loan modification.

Sue

Liz Moir asked:




The news about the home loans industry in the recession varied all the time.

The original news at the beginning of the credit crunch was accurate when it was reported that these three home loan products were very much in the decline

The reason for that of course was obvious, as apart from people being unsure of their financial futures, the underwriting of lenders became so restricted that even those who wanted a mortgage, remortgage or secured loan were unable to obtain them.

Before the recession the criteria for these three products was very relaxed, and a great many people were eligible to apply for and be granted these loans.

Mortgages and remortgages were available up to 100% of the value of the property, and the Northern Rock advanced at up to 125% LTV.

These 125% plans were supposed to comprise of a 100% mortgage and a personal loan for the rest. However this was not the case, as the sum granted over this was secured on the property and added to the total borrowings of the applicant.

At that point self declarations of income were available for the self employed which meant that the applicants for remortgages, mortgages and secured loans simply declared their own earnings on a business letter head or on a plain sheet of paper accompanied by a business card.

Secured loans were extremely popular, with 100% LTV plans right up to 125% LTV available from a number of lenders.

Therefore it was apparent that the acceptances of applicants for these three loans declined as self declarations were totally abolished for mortgages and remortgages and equity margins were greatly reduced to a maximum of 85% with most mortgage lenders, while a few were prepared to lend up to to 90%.

Secured loans are now advanced at 75% for the self employed and 85% for those in employment.

One lender is prepared to accept self declarations for secured loans at 50% LTV.

The reason for applications declining is therefore obvious, but what is not so easy to understand is that from 2007 until the end of the recession in 2010, reports in the press and on television abounded with contradictory reports, stating one day that remortgages and mortgages were declining, and then not long after we were told by the same sources that they were very much on the up with more people applying.

Now in October, months after the recession, the same thing seems to be happening with reports that the home loans industry is showing great signs of improvement, to be told days later that mortgages were again in decline as the house prices slump again.

The applications for remortgages have not been as low for ten years.

It is to be wondered if there have been any improvements to home loans since the recession ended.

Arthur

Lindsy Emery asked:




Loan modifications have always been around, but with the passage of President Obama’s Making Home Affordable Act they have become a lot more common and the process for modifying home loans has been efficiently streamlined. That’s why we’re seeing so many more loan modifications these days. If you want to look into a modification for yourself, you need to learn about your options for home loan modification hardship assistance.

If you are having difficulty making your monthly mortgage payments, don’t sit and do nothing until you default on the loan and end up losing your house. Take action and visit a financial counselor to talk about your situation while you can still do something about it. Some counselors are free to use and some are not. HUD-approved non-profit groups can give free financial counseling services. But with the large demand of recent years for financial counselors, lots of new loan modification assistance companies have sprung up.

Whether you choose a free service or a for-profit service is up to you; they both have their benefits and drawbacks. Some have attorneys at their disposal and some do not, so if possible you want to choose one with an attorney to work with you to get your loan modified.

It’s important to remember that when you’re dealing with a for-profit company, however, use extra caution. There are a lot of people looking for financial solutions right now and unfortunately, a lot of greedy people are willing to scam them out of their money. Use only reputable companies with good credentials and a history of good customer service. They should also be in good standing with the Better Business Bureau.

The first step is meeting with your counselor. Bring all applicable financial documents and be prepared for a consultation. The counselor will review your financial situation and help you determine what’s best for you.

If it’s determined that a loan modification is your best option, then they’ll get to work helping you write a loan modification hardship letter. This is a letter to your lender that explains why you need your loan modified. Good reasons include layoff, natural disaster, death of a family member, divorce, or medical expenses. Be brief and to the point. Your counselor will help you write the letter and submit it to your lender with appropriate financial documents. It’s important to have a loan mod company working for you and being your advocate during the confusing and technical loan modification process.

Reginald

Jordan Fylonenko asked:




Divorce sucks. Celebrity divorces – well, they suck even more. The multi-million dollar mansion in West Hollywood, the villa in the south of France, and the twelve cars parked in the driveway are all up for grabs when a celebrity couple calls it quits.

It’s no secret that divorces get nasty, especially when there are millions at stake (no pre-nup?). Who gets the house(s)? How much is child support?

Dealing with mortgages in West Hollywood is nothing to scoff at. When millions are on the table and tensions are high, how do these stars get out of their home loans and move on with their glamorous lives?

Move On and Sell Your Home

One of the best ways to get out of the mortgage is to sell the house. The money earned from the sold home can be used to pay off the existing mortgage. The rest of the funds can be split about between spouses. Selling the house gives you freedom from making monthly mortgage payments, taking care of the house, or paying taxes and insurance.

One thing to remember is that the home being sold often has a sufficiently reduced mortgage payment which makes finding a mortgage with the same affordable monthly payment unlikely.

Kick ‘Em Out and Refinance

The second and most common option in dealing with a mortgage is when one spouse keeps the home and then refinances. Usually the spouse that is leaving will give up his or her claim on the house. The secured debt is refinanced into one spouse’s name in an amount sufficient to satisfy the old joint debt and to provide a cash buy-out for any equity the other spouse may have in the asset. Generally, this is the good way to satisfy debt and credit issues as part of a divorce.

It’s vital to remove the name of the spouse who is leaving from the mortgage. Forgetting to do this will keep divorced couples closely tied to each other. When one person fails to make payments on the mortgage, both parties’ finances and credit ratings will fall. Until the refinance is final and the deed on the home has been legally changed, both spouses are still responsible for payments on the house.

Whether you’re a star or just act like one, divorce can hit hard. Make sure to be prepared and know your options. Hiring a good divorce lawyer won’t hurt either.

Brenda

Darin Sewell asked:




Nothing is more frustrating then receiving word you have a declined mortgage refinance loan. Not being able to secure financing can make all the plans that you had seem to go right down the drain. But knowing the common reasons for loan denial can go a long way in helping to stop the potential problem before it starts.

Why Home Loans Are Declined

Home loans are declined because the underwriters at the lenders have decided your loan either did not fit into their lending guidelines or you were to risky a borrower. The underwriters act as a wall of protection for the lender so if something does not make sense to them they may either ask for clarification or deny the loan.

Common Reason For Loan Denial

One of the most common reasons mortgages get turned down is from borrowers giving false or inaccurate information. Many times this is done by accident. Even when done by mistake it is hard for underwriters to look past false information as it appears to look like potential fraud.

Wrong income levels are often stated on loan applications. The best way to avoid this is to go by last years income on your W-2. If you have had a raise and are hourly figure 40 hours a week as your base salary. Wrong income is the quickest way to get your loan terminated in underwriting.

Property values are another common reason mortgages get turned down in underwriting. People may tell their loan officer their home is worth a certain amount only to find out it is worth much less then they thought This is especially true today with the recent drop in real estate values in many parts of the country.

A credit score drop is also another common reason for losing your loan. One of the biggest mistakes people can make is to have multiple mortgage companies pulling their credit. While a few credit pulls will not hurt you having more then 4-5 credit pulls can start to damage your score. To avoid this stick with three reputable mortgage companies and get quotes from each one.

Tonya

Mariza V asked:


I owe 2 houses one under my name, in the rental property I am 1 payment behind in the first deed and 5 payments behind on the second deed. I can’t make the payments no more, I am in home loans, and my paycheck has been reduce soo much. I want to keep only my owner occupied property and let go the rental. Balance is $410,K and $220K on second. I been thinking on calling the lenders to give them the house back, some other friends tell me to do a shortsale, and other to file bankruptcy or forclose the property. at this point all I want is not to have $5,500 mortgage payment a month. I can’t refinance because there is no equity, and my credit has been ruined due to the late payments, I don’t want to go to a credit consultant because my intentions are not to keep the house. I need some advise before I go to an attorney .

Jorge

Dilip asked:


These days, many banks and financial institutions are ready to offer mortgage loans to people with good credit history. Moreover, they are ready to offer different types of mortgage loans that suit different people with different needs. The following points present some of the different varieties of such loans that banks and financial institutions offer:

 

1. Term Loans with Fixed-Term Repayment : These are normal term loan schemes where you get a loan for a fixed duration. The rate of interest can be fixed or can vary based on some benchmark rate.

 

2. Overdraft-Loan : These are loans in the form of current account overdraft where surplus funds can be parked and therefore interest burden can be minimized. Every month, the overdraft limit is reduced as per the Equated Monthly Installment (EMI) amount.

 

3. Flexible-Loans : These are loans with a fixed rate of interest for one part of the loan and a floating rate of interest for the other part. It can be designed as per the convenience of the applicant and up to what is allowed under the rules of the bank/financial institution

 

4. Fixed Interest Loan: These are loans with a fixed rate of interest for the entire duration of the loan. It is well protected against market rate fluctuations. Generally, these rates are somewhat higher than the market rate.

 

5. Floating Interest Loan: Floating rate of interest is the rate that is linked to the Central Bank’s (Federal Reserve) prime lending rate. If the Central Bank increases (decreases) the prime lending rate, then the bank/financial institution also increases (decreases) its interest rate.

 

Generally, it is advisable to go for floating rate of interest as the rates will be lower when the economy

If you want to know more about getting a mortgage loan visit Mortgage Loanand it is always worthwhile to know about other alternatives that are available. To know about home loans visit Home Loan

 



Anita

Richard Lowe asked:


Who doesn’t want to be relieved of paying a high interest rate in a monthly basis? The goal of home mortgage loan modification all about saving money. It is actually an option preferred by several homeowners. You might be asking how much money you can save as you settle with this option. Well, you should understand that it will depend on you. How much savings do you really want to gain? The following insights will open the possibilities on the reduction of your total monthly expenses by refinancing your home.

Refinancing a Mortgage Defined

Refinancing a mortgage means applying for another loan plan that will pay off your existing debt. As you avail of a new package, you will have to shoulder different terms and conditions. This option is meant to lessen the monthly interest charges that you have to pay for.

Why You Need to Consult an Expert

The mortgage brokers are the experts who specialize in home loans, refinancing loans, home equity loans, mortgage rate computation, and all other types of mortgages. They are the people with whom you can work with if you want to get the best deal out of refinancing your home. They have studied and earned their credibility through the years of serving the homeowners. It is also by consulting an expert that you get to learn the advantages and disadvantages of refinancing, your chances of paying for a lower interest rate, your home’s equity and cash out benefits, and many more.

You should also know the requirements, the qualifications to become eligible for refinancing, and the other types of loans that may fit your needs. Nevertheless, you will be able to save more time and money if you talk to the right person who knows everything about refinancing.

The Benefits to Enjoy with Refinancing

Mortgage refinancing means that you can save thousands of dollars, lessen the tenure of your own mortgage, heighten your cash flow, and offer you the low interest rates, among others. It is your duty to find the right mortgage broker who can advise you with everything that you can benefit from. Take note that an honest mortgage broker will always consider the potentials that will work to your advantage and lead you to the best deals.

Refinancing as a Money-Saving Opportunity

Generally, a new mortgage will convert your high interest payments into a lower one. This process will then provide you with every opportunity to spend less money on your monthly payments and save more.

Some homeowners decide to shorten the term of their loans. For example, if you refinance your 30-year-mortgage into a 15-year-mortgage, you get to pay lower interest rates. However, you will have to settle a larger monthly bill but the catch is that you are able to save more because you can pay off your debt in a shorter time. On the other hand, some homeowners change the mode of their interest rates from an adjustable rate into a fixed rate loan. Whichever is your choice, you must always be abreast of both the rewards and drawbacks of refinancing your mortgage.

Furthermore, home mortgage refinance packages let you consolidate your debts so that you don’t have to pay for more. The thing is, you allow yourself to save money because instead of paying different interest charges, you simply roll them into one and reduce the amount that you have to settle.



Edith

defyance24 asked:


I want to start improving my credit rating so I can buy a house. I won’t have a problem making the mortgage payments, but my credit is not very good. What should I do? Are there any home loans out there for people how’s credit isn’t so great?

Jay