WHY REFINANCE YOUR HOME

by Zasha Zelada
There are many reasons why you may be interested in refinancing you home. The biggest reason is to save money. When you refinance your mortgage, you are more than likely able to substantially reduce your monthly payments. One tactic people use is to shop the rate around to several different lenders to see what they have to offer and what deals work for them. You may have bought your home in times of relatively high mortgage rates and therefore are locked into higher payments than you should be. If you qualify for a lower rate, you could lock in that mortgage rate and stretch out the payments so that every month you are paying less to live in your home than before. If you decide to refinance your home, you will undoubtedly be confronted with a variety of choices as to what sort of new loan you can get. Refinancing your home mortgage can certainly free up a lot of capital, which gives you the opportunity to do many things, such as needed home improvements, travel, investments or your children's college tuition. Many people who are deeply in credit card debt may want to refinance their homes in order to free up some of their home equity and pay off their other debts. This can be a good strategy if the debt is at a high interest rate. It makes good financial sense to pay off debt, which can be as high as 25% with a new loan at around 6% or 7%. People who refinance their homes often come out better than before. Don't forget to shop around and find the best deal your can for your mortgage and you may be able to have a lot of spare money every month.

How to stop foreclosure from happening to you

by Amy-Jo Strutt
One of the most dreaded things that can happen to anyone is getting behind in your mortgage payments and going into pre-foreclosure. Yes you heard me right, pre-foreclosure. What normally happens when people miss a few mortgage payments is the back sends them a legal notice that they are in breach of their mortgage. This is when the pre-foreclosure process starts. Basically the notice will tell you to either make up the payments immediately, or the bank will be forced to foreclose on the property. Remember, the last thing the banks or lenders want is a property to deal with, they only want their money. The simplest way to keep yourself out of foreclosure is to pay your mortgage first before all your other bills. You are more likely to succeed dealing with a collection agency then you are with the banks and their lawyers. When you miss a mortgage payment or two, you are actually forcing the banks to start proceedings.

The worst part about being foreclosed on is what happens to your credit rating. It really takes a beating and it could take 7 years before your credit report is half decent. So what can you do to stop going into foreclosure. Some simple rules to follow are, if you miss a payment, call you bank immediately and set up an appointment to speak to a lending officer or the manager. The worse thing you can do is ignore their phone calls or letters. If you get in touch with them, they will know you are sincere about working out a plan that is a win win for you both. Contacting them immediately may also put a stop on the foreclosure. Remember, they want their money, not your house.
Most banks will be happy to work with you if you let them. Often what happens is people won't give them the chance and subsequently, they lose their home. In order to keep your self out of financial trouble, be careful not to extend yourself with a large mortgage. Only buy within your means versus what you really want. We all want a bigger home, but that doesn't necessarily mean we can afford one.

Home Buyer: Get a Home Inspection

by By Bill Wehr
Well, you finally found the perfect home. You are filling out the purchase sales agreement. You figure you have enough for the earnest money deposit to be placed in escrow and the lender will want the appraisal fee up front. But now the realtor is advising getting a home inspection. That's extra money. The home looks great. Besides, won't the appraisal reveal any problems?

Buying a home is normally the single most expensive purchase you make. You want to make sure the condition of the home is what you expect. A licensed home inspector is an impartial party to the transaction. The inspector will evaluate the home as is. You will have a written report on the spot or within days.

Saying the obvious- it is important to read the report. It will give the condition of the structure. It will address the electrical, plumbing, heating and air conditioning. There will be a section on any evidence of infestation of pests and dry rot. There will be other sections. Pay particular attention to any items the inspector recommends be corrected. If there are areas such as attic or enclosed area that the inspector found inaccessible that should be identified on the report.

You can find a qualified home inspector in the yellow pages, Internet or your realtor may have a list of several to choose from. The home inspector is working for you because you are paying for the work. The appraisal, although paid by you, is done for the benefit of the lender to determine market value.

By making the purchase of your home contingent upon a satisfactory home inspection report you are protecting yourself from potentially expensive problem repairs that you may not have been aware of when you made the offer to buy. You are also saving yourself the expense of the appraisal until an agreement is reached on how the repairs will be handled.

Guide to Mortgage Trips

by Troy Francis
The Real Estate you own Is Your Best Investment. One of the facts often forgotten is making extra principal payments on you mortgage. You probably have heard the concept of making extra principal payments to reduce interest and payoff your mortgage much earlier. The concept may be simple, but people overlook this all the time. A typical promissory note amounts to incredible interest over thirty years. For example, on a thirty year $100,000 loan at 9%, you will pay over $189,000 in interest.

If you have a cash flow on your rental properties or other mortgages, consider using it to make extra principle payments. By making extra principle payments, even just a few, you can save lots on interest.
Another example, would be if you paid an extra $60/month the loan described above, you would save $49,000 in interest and pay off the loan much earlier. If you paid an extra $100 per month, you would save over $75,000 in interest and pay off the balance ten years earlier.

Save Money on Late Fees. If you one of those persons that sends payment at the last minute and are in danger of paying your mortgage late, send your payment express overnight mail. The cost of doing so is will probably be much less than your late payment. It will also not look bad on your file. An example of a 5% late penalty on a $2,000 payment is $100. Sending the payment via Federal Express will cost you less than $20.

Tips on Holding a Mortgage in Default. Example, if you sold a property and took back a mortgage, you have an option to your foreclosure procedure . . . sue on the promissory note. Remember that a mortgage is security, and you can always forego the foreclose proceeding and sue the borrower for nonpayment on the note. This may be desirable if the property has little equity and the borrower has other assets to attach. However, if you have to elect one remedy or the other; once you choose to sue on the promissory note, you waive your right to foreclose the property.
Bankruptcy- A borrower in default can file for bankruptcy to stop your foreclosure proceeding. Once the bankruptcy petition is filed, the state court foreclosure proceeding is subject to an automatic "stay" (which means you must stop all of your collection efforts). This might delay your foreclosure. As a secured creditor you will have first dibs at the property over unsecured creditors. You can have go into federal court and ask the judge to have the stay lifted against you. However, if the debtor files for chapter 13, he or she may be able to ask the judge to force you to accept a payout plan. Either way you all of your efforts will get you paid.

Consider a "Deed- If you are in a mortgage state, the borrower can sometimes delay the proceeding for months by simply filing in writing against the complaint, raising the number of defenses. Sometimes on of the best way is to try to work it out with the borrower. But make sure that you're not shortchanging yourself. It may be less hassle and cheaper for you to waive the back payments. That gives you the property back and that is what the objective really is. Remember that it might take time for the process, but in the end it will be well worth it.

Shopping For a New Home

by Ingrid Macher
Congratulations on your decision to get a new home, now is the time to consider some aspects to help you find your dream home.

First and most importantly, find a professional Real Estate agent to help you get through the process. Before you decide how many bathrooms you need, or what area is the best, it's important to know how your credit is and if your actual financial situation is in good condition, and finally, how much you are going to be able to qualify for on a mortgage.

All these aspects are important to consider before you get in your car and drive around looking for you next home. So the beginning to buying a property starts with researching for a good real estate agent, somebody that you like and trust. You can find these qualified people on the internet or through the newspaper or possibly by referrals. The second step is to interview the agent and see what service he or she is able to offer to you and if you have to make a commitment to work with one person at a time.

After you select the agent that you feel most comfortable with, it's time to bring all the questions that you think are important to you in order to know if you are going to be able to aford the house.

The financial part is the most important one - that means your credit score, your monthly income, proof of employment, downpayment, etc. You will need to know how much money you are going to need for closing the transaction. Generally closing costs are 10 percent, byt sometimes it's up to an additional 3%. Finally, earnest deposit money is the first thing you will need to make the offer.

A proffesional real este agent is trained to help you through this financial part, but in addition to that, after you establish your criteria, is able to search easily for your criteria in a computer system, looking around all tha neighborhoods that you are interested in and show you all the properties available in the real estate market, before you get in the car. This means you get pictures and sometimes virtual tours, etc. so that you can disqualify the properties that you do not like, saving you time and inconvenience.

When you find your dream home, it's important to ask questions about the area, school, amenites like grocery stores, doctors offices, recreation areas, libraries etc. Sometimes driving around the neighborhood to identify these factors helps you to make the best decision.

Remember that working with a good agent, saving you time, money and inconvenience, is the best way to find what you want. Somebody that does the job for you, review all the contracts, negotiate the best deal, make sure the house passes all the inspections and is ready for you to move in immediately. Good luck on your new home.

Subprime Mortgages - Information

by Dan Lewis
Undoubtedly, you've heard the radio commercial claiming you can get a mortgage despite having bad credit. Bad credit mortgages are better known as subprime mortgages.
Subprime
"Subprime" is a euphemism for a borrower who simply doesn't qualify for a traditional home mortgage. Subprime loans used to be very difficult to get, but things changed in the 1990's. Banks began to realize there were a lot of borrowers with less than stellar credit or other problems. More borrowers meant more revenues, so banks started creating subprime mortgages and the game was on. As a result of these new loans, home ownership in the United States has risen to all time highs.

One of the biggest determinants in qualifying for a loan is your credit score. A borrower's credit history is analyzed using a "FICO" score, named after Fair Isaac and Company, Inc. Generally, a FICO score below 620 is considered an indication of bad credit. The borrower is then classified as a subprime borrower.

Importantly, a FICO score below 620 is not the only reason a person may be classified as subprime. An infrequent borrowing history, new employment position or expensive home may also key the designation. In fact, nearly 50 percent of subprime borrowers have FICO scores above 620.

When a lender writes a mortgage, it is betting on whether the borrower will repay the loan completely and in a timely manner. The better your credit score, employment history and so, the better deal you will get from the lender. Obviously, subprime borrowers aren't going to get the best deal. Instead, a lender may require a larger down payment and will certainly designate a higher interest rate than given to "good" borrowers. In addition, subprime borrowers may have to pay points just to get the loan.

The trade off of all of this, of course, is that you get a loan to buy a home. Home ownership has consistently proved to be one of the best long-term investments in the United States. While Americans are criticized for failing to save money, they are effectively doing so by purchasing homes and building equity in them.

Should you apply for a subprime loan if you have less than stellar credit or other problems? There is no right answer, so you should consider sitting down with an independent mortgage broker to analyze your situation.

Mortgage Brokers

by Dan Lewis

When applying for a home loan, it can be difficult to ascertain your options and the best deal out there. Mortgage brokers can help you shop for the best loan for your situation.

Mortgage Brokers

A mortgage broker is an independent professional assisting homebuyers with their mortgage needs. Instead of a loan officer for a bank, a mortgage broker typically works with tens or even hundreds of lenders. This independence lets mortgage brokers hunt for loans that fit the credit history and particular lending needs of a person.

Let's assume you have less than stellar credit when you apply for a loan at ABC Lender. The lender pulls your credit report and determines you don't qualify for any of the loans offered by the lender. The lender is going to drop you like a rock and move onto the next potential borrower.

Now, let's make the same assumption regarding your credit score, but put a mortgage broker in the place of a lender. The mortgage broker is going to look at your credit score, income and overall borrowing circumstance. The broker is then going to give you options and a recommendation regarding the best loan for you. Instead of hoping to get financing, you are now in a situation where you are evaluating the best financing options.

Mortgage brokers can help anyone, but are particularly valuable in two circumstances. The two circumstances are bad credit and document overload.

If you have bad credit, even horrible credit, a mortgage broker is going to be able to hunt down loan options. Many people make the mistake of believing bad credit precludes them from getting a loan. It doesn't. The loan terms may require more points or a higher interest rate, but bad credit doesn't preclude home ownership.

For some borrowers, the monstrous amount of paperwork required in the loan process can be overwhelming. When you use a mortgage broker, the documentation is all taken over by the broker and his staff. In fact, mortgage brokers have people known as processors on their staff who do nothing but compile, organize and process all the documentation needed for loans. The do this everyday and are masters of the process.

The decision to use a mortgage broker is often a good one. A good broker is going to help you get the best loan while making the actual loan process a lot easier than going it alone.