Before you can effectively get a refinance for your home loan, banks normally have to judge whether you have qualified for the requested loan. It is the norm for them to study your credit information and request relevant supporting paperwork to corroborate your earnings, your collateral and anything else that will establish your credit worthiness. To save yourself a lot of frustrating time, the following are some suggestions to help decide whether you will be approved for home / mortgage refinancing.
It is common knowledge that a persons credit history is everything to do with being approved for a refinance loan. If you want to get a direct home loan refinance approval then confirm that everything related to your credit rating is in financial order.
If someone has a poor credit rating it is still possible to obtain some refinancing but as they are considered a risk then the loan refinancing rate will increase.
Obtaining your credit reports should be done and also be realistic to see how you will realistically appear to a lender. If you are able to improve your existing credit score then will probably go some way toward reducing the interest rate on the loan refinance. Paying off smaller loans is always a good idea.
Lending institutions traditionally favor people who have good credit and stable employment. Realistically this is becoming ever more difficult as the recent financial troubles around the world have demonstrated. However, the financial "experts" that are left to give us sound financial advice call the shots and we have to play by their rules if we want some of their money.
We all know that banks and lenders are in the business to make money from lending money. Naturally they want to lessen their risk which is why they gravitate toward the traditional, stable family man with 2.4 children. It is a harsh fact of life that people who have run into genuine difficulties through no fault of their own, for example unemployment, disability or severe sickness are unlikely to be looked upon with any leniency or compassion by the lenders even though by using human judgement rather than a "foreclosure checklist" a lot of the financial and personal stress could be avoided.
This is how banks customarily decide upon who is classed as a low risk when it comes to borrowing or refinancing. In essence they look at the total debt and if it is more than 38% of your monthly income then generally this is considered a good borrower. As home equity, (the difference between the actual worth of the property and what is owed on a mortgage), increases the more can be borrowed for the purposes of refinancing the home loan. It is unlikely that a bank or a lender will exceed 80% of the due balance on a property mortgage.
About the Author
For information on how to Avoid Foreclosure on your home mortgage and Home Equity Refinancing please visit AvoidHomeForeclosuresNow.com
Your Search Engine
Custom Search
Friday, June 19, 2009
Loan Modification - How to Save Your Home from Foreclosure
A loan modification is essentially for home owners who are having financial difficulties in making the mortgage payments due to job loss, or the property value has dropped significantly in where it would not be possible to refinance.
How it works in a nutshell is that a borrower will contact a mortgage broker to re negotiate their mortgage, possibly by either extending the loan term to lower payments or other means in which can help lower your monthly payments.
If you are looking to modify your existing mortgage, there are a few things you should do to prepare before you contact a mortgage broker.
You will want to make a financial statement that lists a tally of all your monthly expenses that you make on an ongoing basis for you and your family. This would include such things as utilities, grocery bills, clothing, car payments, insurance, medical, gas, credit cards etc. Once you have made a complete list of expenses, you will want to create a spreadsheet to give an average for the last 3-4 months in case of varying expenses to give to your broker.
Remember that before a broker even considers a loan modification, he will ask you for a financial statement, so be prepared and have it ready before you make that initial call to a lender.
Prepare a 'hardship' letter. A hardship letter is basically a 1 -2 page report (no more than 2 pages) on why you need someone to look at your loan to modify it. Some possible reasons could be due to job loss, or the fact that you were in an adjustable rate mortgage but you have lost equity in your home due to the property value drop in recent times and are no longer eligible for a refinance. All these things would be considered as valid explanations that you could include in a 'hardship' letter.
Put some time aside of at least an hour or 2 every day to start calling various brokers and lenders. This can be a time consuming process, because you will be subject to long waits on the telephone, you have to talk to many different representatives and go through your financial statement and hardship letter. You will want to be able to answer all their inquiries as best as you can so that they can determine if your are eligible for a loan modification or not.
You should also have pay stubs and bank statements ready because they will most likely ask you to submit these items by fax if they don't take this information over the phone. So be prepared to fax your financial statements, hardship letter and all other stubs and account statements before you call.
You must be aware that the turn around times can take anywhere from 15 -30 days and some banks are taking up to 60 days to review your loan modification request. It all depends on your situation, if you are close to foreclosure, the banks will give higher priority for those cases, if your situation is not considered crucial then you stand a chance of waiting much longer for an answer.
It doesn't matter where you are in all of this, if you are making your payments, and you don't have an adjustable loan, but things are tough or you are in an adjustable rate mortgage, yet you haven't made your payments for the last couple of months, or maybe you have already contacted somebody for a loan modification and you got denied. You still have a chance to get help, you just need to know somebody who understands how these institutions work and what it takes to get approved.
This is where having a good loan modification mediator comes in. I many cases people will try to get the paper work done themselves and try to negotiate with lenders when they have never done such a thing before.
Remember the banks and lenders are professionals who don't have your personal interests at heart. They understand the ins and outs better than you and will offer what suits them best, if you get them to approve your loan modification request in the first place.
The best way to get a good mediator is through either word of mouth referrals or do an in depth research online and talk to as many people as possible in your area. This is the only way that you will have a good chance at winning the battle with lenders.
About the Author
Patrick Sheen Financial writer for
www.I-RefinanceToday.com
www.Loans-Online-Resource.com
How it works in a nutshell is that a borrower will contact a mortgage broker to re negotiate their mortgage, possibly by either extending the loan term to lower payments or other means in which can help lower your monthly payments.
If you are looking to modify your existing mortgage, there are a few things you should do to prepare before you contact a mortgage broker.
You will want to make a financial statement that lists a tally of all your monthly expenses that you make on an ongoing basis for you and your family. This would include such things as utilities, grocery bills, clothing, car payments, insurance, medical, gas, credit cards etc. Once you have made a complete list of expenses, you will want to create a spreadsheet to give an average for the last 3-4 months in case of varying expenses to give to your broker.
Remember that before a broker even considers a loan modification, he will ask you for a financial statement, so be prepared and have it ready before you make that initial call to a lender.
Prepare a 'hardship' letter. A hardship letter is basically a 1 -2 page report (no more than 2 pages) on why you need someone to look at your loan to modify it. Some possible reasons could be due to job loss, or the fact that you were in an adjustable rate mortgage but you have lost equity in your home due to the property value drop in recent times and are no longer eligible for a refinance. All these things would be considered as valid explanations that you could include in a 'hardship' letter.
Put some time aside of at least an hour or 2 every day to start calling various brokers and lenders. This can be a time consuming process, because you will be subject to long waits on the telephone, you have to talk to many different representatives and go through your financial statement and hardship letter. You will want to be able to answer all their inquiries as best as you can so that they can determine if your are eligible for a loan modification or not.
You should also have pay stubs and bank statements ready because they will most likely ask you to submit these items by fax if they don't take this information over the phone. So be prepared to fax your financial statements, hardship letter and all other stubs and account statements before you call.
You must be aware that the turn around times can take anywhere from 15 -30 days and some banks are taking up to 60 days to review your loan modification request. It all depends on your situation, if you are close to foreclosure, the banks will give higher priority for those cases, if your situation is not considered crucial then you stand a chance of waiting much longer for an answer.
It doesn't matter where you are in all of this, if you are making your payments, and you don't have an adjustable loan, but things are tough or you are in an adjustable rate mortgage, yet you haven't made your payments for the last couple of months, or maybe you have already contacted somebody for a loan modification and you got denied. You still have a chance to get help, you just need to know somebody who understands how these institutions work and what it takes to get approved.
This is where having a good loan modification mediator comes in. I many cases people will try to get the paper work done themselves and try to negotiate with lenders when they have never done such a thing before.
Remember the banks and lenders are professionals who don't have your personal interests at heart. They understand the ins and outs better than you and will offer what suits them best, if you get them to approve your loan modification request in the first place.
The best way to get a good mediator is through either word of mouth referrals or do an in depth research online and talk to as many people as possible in your area. This is the only way that you will have a good chance at winning the battle with lenders.
About the Author
Patrick Sheen Financial writer for
www.I-RefinanceToday.com
www.Loans-Online-Resource.com
Understanding the Nature Of A Short Sale
There is a new buzz word being used in the real estate world nowadays. That word is short sale. A short sale is a sale price that has been set a the homeowner at a reduced price to move a home quickly without all of the normal parameters of a closing a real estate deal.
Short sales come in one of two forms and are typically encountered when a homeowner is behind in their mortgage and have been sent a notice from the bank that the home is being foreclosed on and that a date has been set for the public auction of the house.
As the threat of foreclosure looms over the homeowner a short sales gives them a quick way out of their financial downfall. However, the owner does need to negotiate with the bank on what amount the bank will accept for the house to forgive the remainder of the debt.
Usually the negotiation process is simple and short, thus the terminology, a short sale. However, if a homeowner owes more that the value of the home due to overspending or refinancing to pull equity out of the house the bank may take up to six months to negotiate the sale of the home.
The good news for the owner that is selling the property is that they still occupy the home without any additional penalty while the negotiations are being sorted out. For a patient buyer a short sale can save money on the purchase of a home as the sales price is usually below market value for the property.
The other type of short sale works in much the same way except as the first short sale, except that instead of the home owner setting the price and negotiating with the bank, the bank has already taken possession of the house and gone through the foreclosure process, evicting the delinquent tenants along the way. The bank then sets an approved price for the house that they will accept.
Bank approved short sales move quickly as all of the negotiation is already done and the bank need only accept serious offers for the vacant home. Bank approved short sales are rarely on the market for a day or two as eager buyers are ready to move on these properties and have pre-qualification letters to support their offers.
The real difference in a short sales and a regular sale of a home is that the short sales specifies that a house is in as is condition and no work will be done by the seller to bring the house up to regular selling standards. In some cases houses that are vacant may need to be cleaned or have minor repair work done to them to make them livable for the buyer. In either case of a short sale the buyer is assured to get a good deal on the home even with any repair work that may be required.
About the Author
Re/Max New Jersey (http://www.remax-nj.com) is one of the top real estate companies of New Jersey homes for sale. Art Gib is a freelance writer.
Short sales come in one of two forms and are typically encountered when a homeowner is behind in their mortgage and have been sent a notice from the bank that the home is being foreclosed on and that a date has been set for the public auction of the house.
As the threat of foreclosure looms over the homeowner a short sales gives them a quick way out of their financial downfall. However, the owner does need to negotiate with the bank on what amount the bank will accept for the house to forgive the remainder of the debt.
Usually the negotiation process is simple and short, thus the terminology, a short sale. However, if a homeowner owes more that the value of the home due to overspending or refinancing to pull equity out of the house the bank may take up to six months to negotiate the sale of the home.
The good news for the owner that is selling the property is that they still occupy the home without any additional penalty while the negotiations are being sorted out. For a patient buyer a short sale can save money on the purchase of a home as the sales price is usually below market value for the property.
The other type of short sale works in much the same way except as the first short sale, except that instead of the home owner setting the price and negotiating with the bank, the bank has already taken possession of the house and gone through the foreclosure process, evicting the delinquent tenants along the way. The bank then sets an approved price for the house that they will accept.
Bank approved short sales move quickly as all of the negotiation is already done and the bank need only accept serious offers for the vacant home. Bank approved short sales are rarely on the market for a day or two as eager buyers are ready to move on these properties and have pre-qualification letters to support their offers.
The real difference in a short sales and a regular sale of a home is that the short sales specifies that a house is in as is condition and no work will be done by the seller to bring the house up to regular selling standards. In some cases houses that are vacant may need to be cleaned or have minor repair work done to them to make them livable for the buyer. In either case of a short sale the buyer is assured to get a good deal on the home even with any repair work that may be required.
About the Author
Re/Max New Jersey (http://www.remax-nj.com) is one of the top real estate companies of New Jersey homes for sale. Art Gib is a freelance writer.
Finding Foreclosure Property
The current foreclosure pandemic continues widespread across the nation. While a number of arguments and opinions can be presented as to why the country finds itself with a record-breaking number of foreclosures, the fact still remains that there are a lot of properties facing foreclosure filings across our nation. While this is a problem for many, it is also represents a favorable time for many real estate investors and homebuyers to obtain great deals on property. An awareness of the areas where foreclosure rates are elevated is one of the first courses of action when looking to invest in real estate.
According to Realty Trac, in the month of May 2009, the top three states contributing the most foreclosure filings were Nevada, California, and Florida. These three states alone contributed more than one half of the 321,000 foreclosure filings for the entire country in the month of May.
In Nevada, 1 in every 64 homes undergoes foreclosure, making it the state with the highest foreclosure ration in the nation. Clark and Lyon Counties are the biggest contributors in Nevada including cities like Las Vegas, Henderson, Mesquite, Fernley, Yerington, Dayton, and Silver Springs.
California follows next in rank with a ratio of 1 in every 144 homes undergoing foreclosure. Notable counties contributing to this percentage encompass San Bernardino, Kern, Orange, Madera, and Merced. In these counties are cities such as San Bernardino, Ontario, Madera, and Merced.
Not trailing far behind California is Florida with a ratio of 1 in every 148 properties filing for foreclosure. Miami-Dade, Broward, Duval, Collier, and Orange Counties are main contributors having cities like Miami, Jacksonville, Naples, and Orlando.
A knowledge of where these regions of high foreclosure rates exist, provides an excellent foundation for a homebuyer or real estate investor in taking advantage of the remarkable deals that can be found when purchasing foreclosed property.
About the Author
Alan Barker is a real estate agent in Utah.
According to Realty Trac, in the month of May 2009, the top three states contributing the most foreclosure filings were Nevada, California, and Florida. These three states alone contributed more than one half of the 321,000 foreclosure filings for the entire country in the month of May.
In Nevada, 1 in every 64 homes undergoes foreclosure, making it the state with the highest foreclosure ration in the nation. Clark and Lyon Counties are the biggest contributors in Nevada including cities like Las Vegas, Henderson, Mesquite, Fernley, Yerington, Dayton, and Silver Springs.
California follows next in rank with a ratio of 1 in every 144 homes undergoing foreclosure. Notable counties contributing to this percentage encompass San Bernardino, Kern, Orange, Madera, and Merced. In these counties are cities such as San Bernardino, Ontario, Madera, and Merced.
Not trailing far behind California is Florida with a ratio of 1 in every 148 properties filing for foreclosure. Miami-Dade, Broward, Duval, Collier, and Orange Counties are main contributors having cities like Miami, Jacksonville, Naples, and Orlando.
A knowledge of where these regions of high foreclosure rates exist, provides an excellent foundation for a homebuyer or real estate investor in taking advantage of the remarkable deals that can be found when purchasing foreclosed property.
About the Author
Alan Barker is a real estate agent in Utah.
Cost of a foreclosure vs loan modification
Today, many homeowners who are facing difficult times are comparing the costs of foreclosure versus a loan modification. Regardless of how difficult your situation may be, a foreclosure is a very bad option.
Many homeowners mistaking think that that they may not qualify for a loan modification because they are behind with their payments or have no equity. It is the refinance mindset as I call it- 'I am never going to be able to refinance my home, so I definitely won't qualify for a modification'. This is not true. A loan modification is not only for reducing mortgage payments. In fact, the primary reason for a modification is too help homeowners avoid foreclosure. However, ancillary benefits include a lower interest rate, a lower payment and sometimes a principle reduction of the outstanding balance of the loan. In addition, if you are currently late with your payments, upon completion of the modification, you will be brought back to current. It's like a fresh start.
Allowing your home to go into foreclosure, on the other hand, can have devastating effects. If you absolutely decide that you do not want to stay in your home this should still not be an option. Abandoning your home does not mean you are absolved from the liability. Eventually, the bank will sell home at auction so that the proceeds can be used to satisfy the existing debt. Now, here is the problem. Many times the proceeds from the sale are not enough to fully pay off the existing lien on the property. The remaining unpaid balance now becomes a judgment that will stay attached to homeowner's credit indefinitely.
The alternate solution would be a short sale agreement, or deed in lieu. Basically, these agreements are just an understanding between you and your bank that you are going to surrender the property and in exchange, they will not come after you for the deficiency balance once the property is sold. It is not a foreclosure and you can make a clean break from the property without any repercussions.
If your intent is to try and stay in the home, consider a mortgage modification. Your credit, income and home equity are not evaluated in the same way that they are for refinance. A modification is not only for reducing your payments, it is designed to save your home and bring your payments back to a current status. With recent changes, it is now easier than ever to do a modification on your own. You just need some basic knowledge about the process and how to present yourself in the best possible way to get an approval. A Do It Yourself Loan Modification guide, will walk you through the process and ensure that you have the best possible outcome.
The cost of foreclosure vs a loan modification can be significant if you don't consider all of your options. The first question you should ask yourself is 'do I want to save my home'. If the answer is yes, explore a loan modification today. For more information visit www.mortgageloanmodificationsecrets.com
About the Author
A mortgage professional with 20 years experience in all aspects of lending. Formally trained as credit analyst (Chase). My goal is to educate consumers about financing options. For information about the Do-It-Yourself Guide visit http://www.mortgageloanmodificationsecrets.com
Many homeowners mistaking think that that they may not qualify for a loan modification because they are behind with their payments or have no equity. It is the refinance mindset as I call it- 'I am never going to be able to refinance my home, so I definitely won't qualify for a modification'. This is not true. A loan modification is not only for reducing mortgage payments. In fact, the primary reason for a modification is too help homeowners avoid foreclosure. However, ancillary benefits include a lower interest rate, a lower payment and sometimes a principle reduction of the outstanding balance of the loan. In addition, if you are currently late with your payments, upon completion of the modification, you will be brought back to current. It's like a fresh start.
Allowing your home to go into foreclosure, on the other hand, can have devastating effects. If you absolutely decide that you do not want to stay in your home this should still not be an option. Abandoning your home does not mean you are absolved from the liability. Eventually, the bank will sell home at auction so that the proceeds can be used to satisfy the existing debt. Now, here is the problem. Many times the proceeds from the sale are not enough to fully pay off the existing lien on the property. The remaining unpaid balance now becomes a judgment that will stay attached to homeowner's credit indefinitely.
The alternate solution would be a short sale agreement, or deed in lieu. Basically, these agreements are just an understanding between you and your bank that you are going to surrender the property and in exchange, they will not come after you for the deficiency balance once the property is sold. It is not a foreclosure and you can make a clean break from the property without any repercussions.
If your intent is to try and stay in the home, consider a mortgage modification. Your credit, income and home equity are not evaluated in the same way that they are for refinance. A modification is not only for reducing your payments, it is designed to save your home and bring your payments back to a current status. With recent changes, it is now easier than ever to do a modification on your own. You just need some basic knowledge about the process and how to present yourself in the best possible way to get an approval. A Do It Yourself Loan Modification guide, will walk you through the process and ensure that you have the best possible outcome.
The cost of foreclosure vs a loan modification can be significant if you don't consider all of your options. The first question you should ask yourself is 'do I want to save my home'. If the answer is yes, explore a loan modification today. For more information visit www.mortgageloanmodificationsecrets.com
About the Author
A mortgage professional with 20 years experience in all aspects of lending. Formally trained as credit analyst (Chase). My goal is to educate consumers about financing options. For information about the Do-It-Yourself Guide visit http://www.mortgageloanmodificationsecrets.com
Subscribe to:
Posts (Atom)
Your Search Engine
Custom Search
Posts
