Wednesday, February 23, 2011

The 1% Rule of Mortgage Refinance

Is the 1% Rule the best way to decide whether to refinance? In other words, if I can reduce my interest rate by 1% should I refinance?

Some people think so. Let's look at a few ideas and then you tell me if it is the best way for you to decide. What are you trying to accomplish? Are you trying to reduce your interest rate which will lower your monthly payment, or are you trying to reduce your total cost of the loan (current interest obligations vs. interest obligations of new loan plus refinancing costs)? Interest obligations of new loan don't only reflect the interest rate though. The length of the mortgage has a lot to do with it too. Are you going back to 30 years, or will you go to a lesser term (15, 20 or 25 years)? This impacts on your total cost too.

Maybe what you want or need is a lower monthly payment. You have to consider just reducing your monthly payment on the mortgage alone vs. reducing your total monthly payments by including your credit cards too. Are you afraid you won't be able to keep up your current payments and you stand to lose your good credit rating or even your home?

Lowering your monthly payment on your mortgage alone while going back out to 30 years may or may not result in a total savings over the life of the loan. When you include your credit cards and their higher interest rates in the equation, your chances for saving on a mortgage refinance increases.

How long do you plan to live in your present home? It takes time to recoup the cost of refinancing. The longer you plan on staying put, the greater your chance of generating savings by refinancing your mortgage.

You can see how this is different than just lowering your interest rate. The 1% Rule doesn't always work so well. Decide what you need or want before moving on to whether you should refinance. Then, a mortgage professional can run some numbers and help you decide.

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Thursday, February 17, 2011

How to Apply for a Bad Credit Mortgage

Applying for a bad credit mortgage can be difficult, but there are some steps to making it easier. Banks usually require that a borrower has a low debt ratio, good credit history, and a stable income. If a borrower is lacking one of these factors it may be more difficult to get a loan. Listed below are some helpful tips you should consider when applying for a bad credot mortgage.

To qualify for a home loan, the lenders will often look at your credit rating and history. Credit can become bad for a number of reasons but no matter what the cause, bad credit will create problems if you want a new mortgage on your house. You should start by getting a full credit report and assessment on your financial situation. This will help you to find out your credit score and how difficult it will be to get a bad credit mortgage.

Even if a bad credit is inevitable, try to improve your score as much as possible. This will greatly increase your qualifying chances and lower the interest rates for your loan. If there are any inaccuracies with your financial history, contact your bank and try to get them resolved.

A bad credit mortgage status is usually the result of a maxed out credit account or late payments on your previous financial loans. This can make it difficult or even impossible to get accepted for a mortgage with standard rates. You may get accepted but the interest rates will be much higher. If you want to save money, try waiting until your score improves before reapplying.

FHA mortgages are the best deals for people who have bad loan histories. This deal does not require the applicant to have an excellent credit record to get a low interest rate since it is a government program. Home loans can be made with a low down payment, which creates a lot more opportunities for people do not have a lot of money available.

To qualify for the FHA mortgage, borrowers will need to prove that their income is enough to make the payments every month. For this deal, the house value and size of the loan are very important factors for qualify. Not every area has government bad credit mortgage loans, so check where you are to see if there are any available. The FHA loan is limited to the county where the house is located. This type of bad credit mortgage loan should be on the top of your list, but keep other options available in case there is a better deal elsewhere.

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Wednesday, February 2, 2011

A Mortgage Modification Company Could Be A Bad Idea

It 's really hard to see that we as a people have not learned from our past and are once again starting to repeat it. I'm not trying to be negative just for the reason of bringing down your hopes but I'm trying to save some trouble for someone and hoping that someone will pay very close attention to what I am about to say.

Just in case you have missed the majority of the last couple years, PLEASE NOTE: MODIFICATION COMPANIES ARE A ROTTEN! Please know that I am, saying this since I have lived and worked on all 3 sides of the business. After having experienced what it's like to be involved on both sides of the business I can truly say that there are so many potholes for the average Homeowner that tries try to navigate the Loan Modification / Foreclosure Defense process alone.

There are so many little things that can be missed while going it alone in matters of Foreclosure. If you miss one piece of mail After all it is your HOUSE and your family safety on the line. The CONS are endless, people impersonating Attorneys, altering numbers on HUD statements so they can pocket the difference through title. What is wrong with society today, its almost as if the whole world has gone crazy? If you are a mortgage holder at risk losing your house to foreclosure, the best advice I can give you is to think clearly and evaluate the situation from a calm perspective with a Loved one (someone you trust) and brainstorm for a solution or plan of action after you have taken the time to research a good attorney who has given you a professional perspective on the subject.

After having worked in the Mortgage Biz for years, I left because I saw where the business was heading and I really didn't want to have to bear the burden of guilt for putting people in Loans I didn't agree with. It always seemed that in the Mortgage business the only thing they cared about were numbers, volume of sales and Yield Spread, to be more exact it was all about anything that packed more money in everyone's pocket.

The truth is I really feel good about what I do now because I know we are genuinely helping people and I know that our attorney is governed and held accountable by the Bar Association in our state. It's much more comforting to work in an industry where the agency regulating your industry plays more of an active roll in protecting the public. Do your homework and THOROUGHLY investigate any firm before hiring them to save your biggest asset and the place you call "home." Most State Bar Association Sites have a member search which can help you get a background report on who you are considering to protect your home.

Just think about it before you trust anyone other than a Licensed Attorney to protect your house. Would you give another Penny to the slime that sold you your Predatory Mortgage in the first place? Remember, statistics show that most of those same brokers transitioned from Mortgage Lending into "Home Saving," so think about that before you let them make you a victim a second time.

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