This interest rate ride is almost like a roller coaster ride at an amusement park. And the last week of it has not been fun as interest rates have crept up. The scary part is that we have got so spoiled on such low rates that we are forgetting even in the 5 range that rates are still very good. I think that 20 of the 24 years that I have been in the business that rates have been in the 6.5-8% range so why are we being so critical of a 5ish type rate?
These interest rates like to bounce around and what they will do...none of us know for sure. They eventually will go up but when is any ones guess. Expectations are for them to take a drop again this Spring as they typically do just in time for the Spring and Summer markets.
Bottom line thought though is that if you sit around waiting for that perfect interest rate or perfect time top buy...it will go right past you.
That extra 1/8th is not worth holding out for. It is not going to make that big of a difference on your buying power or your savings on the loan. If you have the opportunity to make it happen...do so.
There are a variety of bonds and notes that are traded on Wall Street. Mortgage Backed Securities are the ones that are traded that directly effect interest rates. These are traded just like stocks and can be all over the place in a given day as they are dependent on supply and demand just like a stock. Economic data is the huge drive for rates but other things can affect them as well such as interactions in other countries and even war. Dependent on the mood of Wall Street these bonds can be very volatile in a given day.
They can swing wildly because these traders that are investing in them are dealing with millions and even billions of dollars so even a slight change can affect their return on investment greatly. Because of this it has been said that traders on Wall Street are out of touch with reality....I would have to agree as they really do not see how it affects the average person when they do what they do.
Most people do not have the ability to access how these bonds are traded so some will just watch what the 30 or 10 year treasury bonds do for direction. These bonds can give you an idea but are not a perfect gauge of what mortgage interest rates are doing.
Next week I will get back in to the home buying process and a few other things. Please remember that if you have comments, feedback or even questions....they are all welcome. I have also started using twitter in an effort to get out various information as it pertains the mortgage and real estate market....feel free to follow me @omsiguy.
Have a great Weekend....it is warming up!!!!
Friday, February 11, 2011
Tuesday, February 8, 2011
Super Bowl is over and Now it is time for Part 4 of the Process.
Well the much anticipated Super Bowl is now over and the Green Bay Packers were the big winners. Will rates make an adjustment based on which team won? That is not a belief that I share but history shows that there will be rate movement after the big game is done. Not right away but slowly after...so lets keep our fingers crossed. The economic data that has been coming out has been good for interest rates but bond traders have not reacted the way we would expect them to.
So every thing is gathered for your loan and documented. The loan officer spots check things and then so does the loan processor. Your debt to income or DTI as they call it will be spot checked to make sure it meets the constraints. This number is the amount of debt that you have plus the housing payment in relation to your income. Of course the amount of your down payment or ability of down payment will be looked at as well as this will determine what financing may be available to you. And then finally the credit score is the big one that comes in to play. The credit score has become a much larger piece of the loan approval process then it used to be as most loan types require a higher score then even a year ago. These 3 factors are the main components that are looked at as a whole in addition to the actual property itself. With these 3 all items are considered for a loan file and the underwriting takes all of them in to account. A strength in one area can help offset a weakness in another.
Now the combination of these same 3 items can decide what the best route of mortgage financing is right for you. With the big mortgage crisis fall out that we have had we are basically back to the basic loan programs that have been around for some time.
Conventional Loan Program - These are not backed by the government and typically require a larger down payment. There are still some specific programs that allow for a smaller down payment but they have some restrictions. Loans with less then 20% down will require mortgage insurance.
FHA Loan Program - These programs were originally designed as a home affordable program for first time buyers especially but is widely used by move up buyers as well. Many of the guidelines for this type of loan are much more liberal then those for conventional loan programs. These loans regardless of the initial down payment will have mortgage insurance.
VA Loan Program - A loan program designed for those that have served in our military, this loan typically requires no down payment what so ever. It does have a small mortgage insurance premium that is referred to as a funding fee.
Under these loan programs there will be options for fixed rate as well as adjustable rate loan programs. The type that works best for you will be determined on your preferences and your constraints.
Next up....Loan Approval and the basic process flow to expect.
So every thing is gathered for your loan and documented. The loan officer spots check things and then so does the loan processor. Your debt to income or DTI as they call it will be spot checked to make sure it meets the constraints. This number is the amount of debt that you have plus the housing payment in relation to your income. Of course the amount of your down payment or ability of down payment will be looked at as well as this will determine what financing may be available to you. And then finally the credit score is the big one that comes in to play. The credit score has become a much larger piece of the loan approval process then it used to be as most loan types require a higher score then even a year ago. These 3 factors are the main components that are looked at as a whole in addition to the actual property itself. With these 3 all items are considered for a loan file and the underwriting takes all of them in to account. A strength in one area can help offset a weakness in another.
Now the combination of these same 3 items can decide what the best route of mortgage financing is right for you. With the big mortgage crisis fall out that we have had we are basically back to the basic loan programs that have been around for some time.
Conventional Loan Program - These are not backed by the government and typically require a larger down payment. There are still some specific programs that allow for a smaller down payment but they have some restrictions. Loans with less then 20% down will require mortgage insurance.
FHA Loan Program - These programs were originally designed as a home affordable program for first time buyers especially but is widely used by move up buyers as well. Many of the guidelines for this type of loan are much more liberal then those for conventional loan programs. These loans regardless of the initial down payment will have mortgage insurance.
VA Loan Program - A loan program designed for those that have served in our military, this loan typically requires no down payment what so ever. It does have a small mortgage insurance premium that is referred to as a funding fee.
Under these loan programs there will be options for fixed rate as well as adjustable rate loan programs. The type that works best for you will be determined on your preferences and your constraints.
Next up....Loan Approval and the basic process flow to expect.
Friday, February 4, 2011
Riding the Roller Coaster....Interest Rates..
It has been a bad week for interest rates as they have crept up slowly all week. The good thing is that they are still low but as they creep up they start to affect home affordibility for many.
Everyone always trys to predict what rates will do and to be honest no one actually knows but they predict in a way that they can't be wrong or right....ust in the ball park. Rates are like a roller coaster swinging up and down and even breaking sideways at times. A wild and wooly ride with lots of uncertainty. The only thing that is certain is that they will change.
Here is a perfect example;
http://www.cartoonstock.com/newscartoons/cartoonists/rma/lowres/rman3169l.jpg
Right now most expect rates to stay range bound for a while until we start to see major changes in our economy. In addtion as they like to follow cycles, many do expect rates to come down after the Super Bowl as we head in to the Spring market.
When you are refinancing or buying that home try not to let greed get in the way of your decision to lock in to an interest rate. Yes you will be mad if you lock and they go down but you will be mad as well if they go up. Use good sense and do what you feel is right instead of rolling the dice.
If rates take a big drop many lenders are willing to renegotiate the interes rate with and for you. You may not get the market rate but if you get a lower rate that is very fair. It is fair because when you execute a lock in with a lender it is a binding contract and the lender has no obligation to do this for you. It is just good business to do so. Remember that if rates go up they are not going to raise your rate if you hae locked in.
And of course we have a big weekend coming up....Super Bowl Weekend.....and as I said before many feel that rates will come down after this weekend....we will see. I personally believe that they will come down towards the end of Feb.
I found this article on the web about the Home Buying Process and thought it would go well with the blog and what I am laying out for you on it.
http://www.cnbc.com//id/41411693
I will continue on with more of this next week again.
For those of us that have received the blessing of so much snow....all I can say is be safe. I was hearing reports today about roofs collapsing. They say that 2 ft of snow on a roof is equal to 38000 pounds. Watch out for the ice dams and stay warm. have a great weekend everyone.
Everyone always trys to predict what rates will do and to be honest no one actually knows but they predict in a way that they can't be wrong or right....ust in the ball park. Rates are like a roller coaster swinging up and down and even breaking sideways at times. A wild and wooly ride with lots of uncertainty. The only thing that is certain is that they will change.
Here is a perfect example;
http://www.cartoonstock.com/newscartoons/cartoonists/rma/lowres/rman3169l.jpg
Right now most expect rates to stay range bound for a while until we start to see major changes in our economy. In addtion as they like to follow cycles, many do expect rates to come down after the Super Bowl as we head in to the Spring market.
When you are refinancing or buying that home try not to let greed get in the way of your decision to lock in to an interest rate. Yes you will be mad if you lock and they go down but you will be mad as well if they go up. Use good sense and do what you feel is right instead of rolling the dice.
If rates take a big drop many lenders are willing to renegotiate the interes rate with and for you. You may not get the market rate but if you get a lower rate that is very fair. It is fair because when you execute a lock in with a lender it is a binding contract and the lender has no obligation to do this for you. It is just good business to do so. Remember that if rates go up they are not going to raise your rate if you hae locked in.
And of course we have a big weekend coming up....Super Bowl Weekend.....and as I said before many feel that rates will come down after this weekend....we will see. I personally believe that they will come down towards the end of Feb.
I found this article on the web about the Home Buying Process and thought it would go well with the blog and what I am laying out for you on it.
http://www.cnbc.com//id/41411693
I will continue on with more of this next week again.
For those of us that have received the blessing of so much snow....all I can say is be safe. I was hearing reports today about roofs collapsing. They say that 2 ft of snow on a roof is equal to 38000 pounds. Watch out for the ice dams and stay warm. have a great weekend everyone.
Wednesday, February 2, 2011
An FHA update and Home Buying Part 3
Well it is another snowy day here in the great Midwest...one that causes drivers to forget how to drive and even causes schools in rural areas to start late. None the less it is another week being started off with info that can be used.
FHA in its wisdom some time back imposed an anti flipping rule, This was meant to stop the quick inflation of home values and prices due to rapid turn times/sales of property's. This was particularly true as values were increasing at a dramatic clip. An investor would buy and sell a home sometimes without ever moving in and within an hour or so of closing on the purchase the new sale would transpire. This was one of the things that caused homes to inflate the way that they did in value.
So FHA came out with a ruling that a a new purchase agreement on a home sale could not be executed within 90 days of the closing date/recording of sale of the previous home sale.
Last year they came out and decided to help infuse the home sale market and to get the economy stimulated that they would allow flips as they call them within 90 days under certain restrictions. They were going to allow this for a specific period of time. The issue was that not all lenders wanted to do them or if they did they imposed some of their own restrictions or overlays in regards to what might be required or allowed for such a transaction.
Well FHA has decided to extend this in hopes to try and jump start the home buying market.
Here is FHA's full announcement off of their website.
http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2011/HUDNo.11-007
Now back to that home buying process.......
The Loan Approval Process consists of a few different things. Who you speak to will give you different items that they feel are important and so I will list what I see.
How much home can a person afford?
In deciding this a lender will look at the following
Credit History
Cash Requirements
Closing costs
Income
Stability of employment
Existing debt
In reviewing these items a lender will help you look what what makes the most sense for you based on your constraints and abilities as well as the constraints of the loan products that you are interested in. Together a plan of action can be derived.
How important is your credit?
More so than in the past, your credit/fico score has become most likely the biggest factor. It can not only effect if you can get a mortgage but also what type and at what interest rate.
Even if you have no credit there can still be options for you.
What are and who determines the settlement fees?
There are 3 basic sets of costs or settlement fees when buying a home.
Down Payment
Amount required based on loan program.
Closing Costs
These consist of costs from the lender, title company, third parties involved in the loan and the government. Most of these are set for the specific task while a few are actually tied to the loan amount.
Pre-Paids
These are the odd costs that are hard for many to explain. Quite simply they are costs of owning your home that you are charged at closing in advance and are placed in to an escrow account. The exception to this would be any per diem based on your closing date.
What does my mortgage payment include?
In most cases your payment will be made up of;
principleinterest
property taxes
home owners insurance
mortgage insurance
The amounts of these items will be based on your individual costs for your property.
What is an escrow account?
Property taxes and home owners insurance are generally part of your mortgage payment. Money for your taxes and insurance is deposited in to a escrow account. When the money for taxes and/or insurance comes due it is paid from this account. When you first open your mortgage account your prepaid taxes and insurance are deposited in to this account. The account is reviewed at least annually to insure that there is enough money being collected to pay your costs.
What can I expect at application?
At application information is collected from the consumer that will aid in the decision making process as well as required disclosures that are to be signed. The information is reviewed and a credit report is run. Generally at this time the loan officer will run the loan through and automated underwriting program to determine loan eligibility. Additional information may be obtained and alternate loan programs may be addressed.
Typical documentation required at application may include;
2 months asset statements
2 years W2 forms
30 days of recent paystubs
Dependent on the situation additional information may be required such as paperwork pertaining to rental properties, bankruptcies, self employment, divorces and more.
We will talk about loan approval, appraisal and title in upcoming blogs as well as various other information as it becomes news worthy.
Again I welcome all comments and questions.
FHA in its wisdom some time back imposed an anti flipping rule, This was meant to stop the quick inflation of home values and prices due to rapid turn times/sales of property's. This was particularly true as values were increasing at a dramatic clip. An investor would buy and sell a home sometimes without ever moving in and within an hour or so of closing on the purchase the new sale would transpire. This was one of the things that caused homes to inflate the way that they did in value.
So FHA came out with a ruling that a a new purchase agreement on a home sale could not be executed within 90 days of the closing date/recording of sale of the previous home sale.
Last year they came out and decided to help infuse the home sale market and to get the economy stimulated that they would allow flips as they call them within 90 days under certain restrictions. They were going to allow this for a specific period of time. The issue was that not all lenders wanted to do them or if they did they imposed some of their own restrictions or overlays in regards to what might be required or allowed for such a transaction.
Well FHA has decided to extend this in hopes to try and jump start the home buying market.
Here is FHA's full announcement off of their website.
http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2011/HUDNo.11-007
Now back to that home buying process.......
The Loan Approval Process consists of a few different things. Who you speak to will give you different items that they feel are important and so I will list what I see.
How much home can a person afford?
In deciding this a lender will look at the following
Credit History
Cash Requirements
Closing costs
Income
Stability of employment
Existing debt
In reviewing these items a lender will help you look what what makes the most sense for you based on your constraints and abilities as well as the constraints of the loan products that you are interested in. Together a plan of action can be derived.
How important is your credit?
More so than in the past, your credit/fico score has become most likely the biggest factor. It can not only effect if you can get a mortgage but also what type and at what interest rate.
Even if you have no credit there can still be options for you.
What are and who determines the settlement fees?
There are 3 basic sets of costs or settlement fees when buying a home.
Down Payment
Amount required based on loan program.
Closing Costs
These consist of costs from the lender, title company, third parties involved in the loan and the government. Most of these are set for the specific task while a few are actually tied to the loan amount.
Pre-Paids
These are the odd costs that are hard for many to explain. Quite simply they are costs of owning your home that you are charged at closing in advance and are placed in to an escrow account. The exception to this would be any per diem based on your closing date.
What does my mortgage payment include?
In most cases your payment will be made up of;
principleinterest
property taxes
home owners insurance
mortgage insurance
The amounts of these items will be based on your individual costs for your property.
What is an escrow account?
Property taxes and home owners insurance are generally part of your mortgage payment. Money for your taxes and insurance is deposited in to a escrow account. When the money for taxes and/or insurance comes due it is paid from this account. When you first open your mortgage account your prepaid taxes and insurance are deposited in to this account. The account is reviewed at least annually to insure that there is enough money being collected to pay your costs.
What can I expect at application?
At application information is collected from the consumer that will aid in the decision making process as well as required disclosures that are to be signed. The information is reviewed and a credit report is run. Generally at this time the loan officer will run the loan through and automated underwriting program to determine loan eligibility. Additional information may be obtained and alternate loan programs may be addressed.
Typical documentation required at application may include;
2 months asset statements
2 years W2 forms
30 days of recent paystubs
Dependent on the situation additional information may be required such as paperwork pertaining to rental properties, bankruptcies, self employment, divorces and more.
We will talk about loan approval, appraisal and title in upcoming blogs as well as various other information as it becomes news worthy.
Again I welcome all comments and questions.
Wednesday, January 26, 2011
Home Buying......Part Deux
There are a few components that need to be thought about when looking at buying a home. These components could effect when you want to make an offer and even when you want to close on a home.
Do you have a lease agreement or a house to sell?
If you have a lease agreement it is important to check when it ends and if there is a buy out clause. Otherwise you could get stuck with an additional payment that you had not counted on. The mortgage company could count this payment against you if you bought a home while still on a lease. Blowing it off would not be a good idea either as it could end up as a collection account against you which would affect your credit and potentially the ability to obtain further credit.
When should I get pre-approved?
There really is no right answer for this but to keep it simple...do it when you decide you want to buy a new home. This way you can sit with the loan officer and see what the constraints may or may not be. You might even be able to formulate a few different options for buying. If for some reason it is determined that now is not the time, a game plan can be designed so you can plan for it in the future.
When should I start looking?
Most agents would suggest that you be pre-approved before you start to look. This way you are looking for homes that are in your range. As for when to look, I personally would start looking about 120 days before I wanted to close and move in on a property.
When do I make an offer?
Once you find that house that you want, you and your agent will sit down and focus in on making an offer on the home. The offer will be made on your constraints and of course the price, condition and listing time of the home. Many think to low ball a home. While this periodically cal work it is not the best advice to try and take with you. With home prices as low as they are right now the amount of time a house has been on the market will be a major factor on what you and your agent will determine to offer for the home. If there are multiple offers being presented your agent may suggest a few things differently then if you were the only offer. Being pre-approved will give you an advantage. be aware that how quickly you can close or if you are asking for seller concessions can play a factor on an offer being accepted. Be aware though that seller concessions are very common at the present time.
What is Prequalification?
Prequalification is simply a rough estimate of how much home you can afford.
What is Pre-Approval?
A pre-approval involves a formal application process and provides you with a formal commitment and ease of mind on how much home you can afford and what interest rate. A pre-approval can in many circumstances take a matter of minutes. The more complex the file, the more time it might take
So many different pieces to this entire puzzle that it will take a while to get it all out there....plus I get questions sent to me and ideas for topics that I need to hit along the way. Make sure to follow or like via google or facebook so you get up to date info.
Big news today is the FOMC meeting as they announced today that they see some signs of an improving economy but will continue with the present plan that they have in plan for stimulating the economy. They are prepared to change and adjust accordingly as they see signs that deem that they need to.
Do you have a lease agreement or a house to sell?
If you have a lease agreement it is important to check when it ends and if there is a buy out clause. Otherwise you could get stuck with an additional payment that you had not counted on. The mortgage company could count this payment against you if you bought a home while still on a lease. Blowing it off would not be a good idea either as it could end up as a collection account against you which would affect your credit and potentially the ability to obtain further credit.
When should I get pre-approved?
There really is no right answer for this but to keep it simple...do it when you decide you want to buy a new home. This way you can sit with the loan officer and see what the constraints may or may not be. You might even be able to formulate a few different options for buying. If for some reason it is determined that now is not the time, a game plan can be designed so you can plan for it in the future.
When should I start looking?
Most agents would suggest that you be pre-approved before you start to look. This way you are looking for homes that are in your range. As for when to look, I personally would start looking about 120 days before I wanted to close and move in on a property.
When do I make an offer?
Once you find that house that you want, you and your agent will sit down and focus in on making an offer on the home. The offer will be made on your constraints and of course the price, condition and listing time of the home. Many think to low ball a home. While this periodically cal work it is not the best advice to try and take with you. With home prices as low as they are right now the amount of time a house has been on the market will be a major factor on what you and your agent will determine to offer for the home. If there are multiple offers being presented your agent may suggest a few things differently then if you were the only offer. Being pre-approved will give you an advantage. be aware that how quickly you can close or if you are asking for seller concessions can play a factor on an offer being accepted. Be aware though that seller concessions are very common at the present time.
What is Prequalification?
Prequalification is simply a rough estimate of how much home you can afford.
What is Pre-Approval?
A pre-approval involves a formal application process and provides you with a formal commitment and ease of mind on how much home you can afford and what interest rate. A pre-approval can in many circumstances take a matter of minutes. The more complex the file, the more time it might take
So many different pieces to this entire puzzle that it will take a while to get it all out there....plus I get questions sent to me and ideas for topics that I need to hit along the way. Make sure to follow or like via google or facebook so you get up to date info.
Big news today is the FOMC meeting as they announced today that they see some signs of an improving economy but will continue with the present plan that they have in plan for stimulating the economy. They are prepared to change and adjust accordingly as they see signs that deem that they need to.
Monday, January 24, 2011
The Process of Home Buying.....Part 1
I thought that it would be good to talk a little more about Home Buying.....especially since things have change so much. There is a lot of information to cover so I will do it over a few different blogs.
Like I said previously; anything that you have heard about buying a home or even encountered in buying a home....forget it...the rules have changed significantly and each situation is different.
The first thing I will do is just go over some FEARS and FACTS that many may have.
Fear: I can't afford to buy a home right now.
Fact: Actually you can't afford not to buy a home right now. Home prices are at lows as are interest rates making a home that much more affordable.
Fear: I should wait until the real estate market gets better.
Fact: There is never a wrong time to buy the right home. For first time buyers, those wishing to purchase a second home or real estate investors...it doesn't get much better then now. For move up buyers you may not get what you want for the home you want to sell but your dream house is now much more affordable.
Fear: I don't have the money for the down payment.
Fact: There are a variety of way to afford the costs of a new home.
Fear: I cant afford to buy my dream home.
Fact: The best way a first time buyer will get to their dream home is to buy their first home. But as I have stated with prices and rates where they are at it could be possible now.
Quick Facts
Average net worth of renters = $4000
Average net worth of home owners = $184,000
Average annual appreciation is 5-6%
A home is a pride of ownership because it is yours
A home is where your wealth can be
Rates finished last week on a good note and we are heading in to our spring market. Typically after the Super Bowl is when things pick up for our local market but it never hurts to get a head start. Make sure you know what you can do versus what you want to do. The constraint table has changed and it is important to get the correct information and pre-approved so you can buy with ease.
Again, please give me comments or email me if you have something you want addressed and of course if you follow this or like it on face book it will help get the word out for others.
Have a great week.
Like I said previously; anything that you have heard about buying a home or even encountered in buying a home....forget it...the rules have changed significantly and each situation is different.
The first thing I will do is just go over some FEARS and FACTS that many may have.
Fear: I can't afford to buy a home right now.
Fact: Actually you can't afford not to buy a home right now. Home prices are at lows as are interest rates making a home that much more affordable.
Fear: I should wait until the real estate market gets better.
Fact: There is never a wrong time to buy the right home. For first time buyers, those wishing to purchase a second home or real estate investors...it doesn't get much better then now. For move up buyers you may not get what you want for the home you want to sell but your dream house is now much more affordable.
Fear: I don't have the money for the down payment.
Fact: There are a variety of way to afford the costs of a new home.
Fear: I cant afford to buy my dream home.
Fact: The best way a first time buyer will get to their dream home is to buy their first home. But as I have stated with prices and rates where they are at it could be possible now.
Quick Facts
Average net worth of renters = $4000
Average net worth of home owners = $184,000
Average annual appreciation is 5-6%
A home is a pride of ownership because it is yours
A home is where your wealth can be
Rates finished last week on a good note and we are heading in to our spring market. Typically after the Super Bowl is when things pick up for our local market but it never hurts to get a head start. Make sure you know what you can do versus what you want to do. The constraint table has changed and it is important to get the correct information and pre-approved so you can buy with ease.
Again, please give me comments or email me if you have something you want addressed and of course if you follow this or like it on face book it will help get the word out for others.
Have a great week.
Friday, January 21, 2011
Should I stay or should I go...Short Sales
This short work week has me totally goofed up. And I believe next week is one as well..at least for the schools. Maybe we should all go back to school and get more time off. Can you imagine having all that time off like we did back then..what would we do with all that free time?
So this housing market free fall has taken its toll on many and for a few different reasons. Lets start with the consumer that got some whacky loan program and knew about what they were getting in to (yes they do exist) or the consumer that did not know what they were getting in to as well. Then of course because of the economy there are those that have lost income/jobs and the most common is just the consumer that as a result has lost equity in their home.
Most likely all are experiencing the lost equity scenario but to what extent is the difference that will be forever in effect going forward. As a result foreclosures are at a high and many are at a loss of what to do. Some people just because they have lost equity in their home have stopped making payments and allowed their homes to go into foreclosure even though they can make the payments. This is one of things that is killing us for home values. So your house has lost value....welcome to the club but you can make the payments so do so please.
Lets focus on a few choices that can be made. Your first choice if you are trying to lower your payment is to refinance. For those that are upside down in equity they may be eligible for a refinance program designed for such loans. Any loan officer can check to see if they are eligible or not. If not another option is to contact the servicer of your loan and see what you can do about a modification. It can be a real pain to do this but it could easily be worth it. I did this myself and got a rate of 2% on my mortgage. If you attempt a modification you need to stay on top of the servicer and get things in timely. It took me over a year to get this done because they have so many attempting to do so.
You really want to avoid foreclosure and with the tightening of guidelines it is even harder to buy a home after one then it was a few years back. While it is not the best choice a short sale is a much better option. With a short sale you are negotiating with the lender to sell your home for $X in hopes that they will write off the rest. It is a complicated process but is the better option. While lenders are looking at this much like a foreclosure it is not as tough on your credit and in some cases you can buy a home sooner then with a foreclosure.
It goes without saying that you want to do what makes the most sense for you and that will vary based on a persons circumstances. The best thing to do though if you are in a mortgage bind is to talk to a loan officer and see if they have any suggestions. If they are good at what they do and are professional they can usually point you down the path that will benefit you the best.
Again....feel free to pass this along....ask me questions or give me comments as I really aim to try and make this blog a useful tool for all.
Go Pack!!!!!
So this housing market free fall has taken its toll on many and for a few different reasons. Lets start with the consumer that got some whacky loan program and knew about what they were getting in to (yes they do exist) or the consumer that did not know what they were getting in to as well. Then of course because of the economy there are those that have lost income/jobs and the most common is just the consumer that as a result has lost equity in their home.
Most likely all are experiencing the lost equity scenario but to what extent is the difference that will be forever in effect going forward. As a result foreclosures are at a high and many are at a loss of what to do. Some people just because they have lost equity in their home have stopped making payments and allowed their homes to go into foreclosure even though they can make the payments. This is one of things that is killing us for home values. So your house has lost value....welcome to the club but you can make the payments so do so please.
Lets focus on a few choices that can be made. Your first choice if you are trying to lower your payment is to refinance. For those that are upside down in equity they may be eligible for a refinance program designed for such loans. Any loan officer can check to see if they are eligible or not. If not another option is to contact the servicer of your loan and see what you can do about a modification. It can be a real pain to do this but it could easily be worth it. I did this myself and got a rate of 2% on my mortgage. If you attempt a modification you need to stay on top of the servicer and get things in timely. It took me over a year to get this done because they have so many attempting to do so.
You really want to avoid foreclosure and with the tightening of guidelines it is even harder to buy a home after one then it was a few years back. While it is not the best choice a short sale is a much better option. With a short sale you are negotiating with the lender to sell your home for $X in hopes that they will write off the rest. It is a complicated process but is the better option. While lenders are looking at this much like a foreclosure it is not as tough on your credit and in some cases you can buy a home sooner then with a foreclosure.
It goes without saying that you want to do what makes the most sense for you and that will vary based on a persons circumstances. The best thing to do though if you are in a mortgage bind is to talk to a loan officer and see if they have any suggestions. If they are good at what they do and are professional they can usually point you down the path that will benefit you the best.
Again....feel free to pass this along....ask me questions or give me comments as I really aim to try and make this blog a useful tool for all.
Go Pack!!!!!
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