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Archive for the ‘Loan and Mortgage’ Category

For a potential borrower, it is normal to be fearful of what the lenders demand of them. Those pursuing a mortgage, or a loan of any kind, feel as though they are completely vulnerable. However, what many borrowers do not realize is that their bargaining power does carry a certain amount of weight. Today, in the United States, many banks and lenders compete among themselves for loan opportunities.

When looking at the power of a borrower taking out a mortgage, things are pretty cut and dry. If the borrower has a strong credit record, valuable assets, and shows both the ability and intent on repaying their loan, then the ball is in their court. The lender is anxious to do business with a potential borrower of this kind. On the other hand, are the potential borrowers whom lenders find much less desirable. Such borrowers might lack assets, or already be in debt, or have a low income. These borrowers will usually find themselves in vulnerable situations with lenders who are willing to take risks. Lenders who are usually small in number and offer only mortgage terms with high interest rates and questionable stipulations.

As you can see there is a strong line of separation for borrowers hoping to become homeowners. This reality can be difficult for young families to face when entering the world of mortgages. However, for those less desirable borrowers out there, there are promising options. Of these, there is what is known as co-borrowing, or co-signing. In this situation, the primary borrower adds an additional person to take on the responsibility of repaying the loan. Thus, when adding a co-borrower, a potential borrower with weak bargaining power increases his or her financial clout substantially. Their powers are combined to receive far better mortgage options.

There are other ways for young borrowers to increase their power and confidence when walking into a bank. To learn more about co-borrowing and additional mortgage options, you can visit valuable websites such as http://www.1californialoan.com No matter what your income and credit history might be, don’t let lenders take advantage of the situation.

If you are in the market for a new home, chances are you are also in the market for a mortgage. That means you will need to have someone to help you create and then apply for the perfect mortgage. There are many different options out there when you apply for your mortgage, from interest-only mortgages to ARMs to fixed rate mortgages, so you need to choose this professional carefully. You may choose either to work with a loan officer or to work with a certified mortgage planning specialist. To make the right decision, you need to first understand the differences between these two professionals.

A loan officer typically works for a financial institution offering mortgages. In order to become a loan officer, an individual must first have earned a bachelor’s degree in finance or another similar field. After finishing college, a loan officer may have found work at a bank in an entry-level position to learn the industry, but this is not always a requirement for the job.

The loan officer’s job is to find and recruit customers who are in need of mortgages or other loans and then help them successfully apply for these loans. This often turns into a sales role, as the loan officer attempts to get the borrower to sign up for a loan with a particular lender. Loan officers will work with real estate agents to get their customers. The officer will work carefully to build relationships with these agents so that the agents will recommend the officer’s mortgage company to their clients.

Sometimes loan officers will try to help you learn about the mortgage options out there to decide which one is the best fit, but often the only role the loan officer has is to help you fill out the necessary paperwork for the mortgage. Once a customer has applied for a loan, the loan officer will study the application to determine whether or not the applicant is worthy of credit. Then the officer and his or her supervisors will decide whether or not to grant the loan. If the loan is granted, the loan officer will complete the process at the closing, when the repayment schedule is agreed to and signed by the customer.

A certified mortgage planning specialist (CMPS) fills a similar role, but with one main difference. While they will help you fill out paperwork, decide if you are qualified, and set up your repayment plan just like a loan officer, the title of “Certified Mortgage Planning Specialist” is only granted to those who have completed a rigorous educational requirement beyond their bachelor’s degree in finance or economics. Also, these professionals have to pass a detailed examination in order to be granted the CMPS certification.

So how does this difference affect you? First, these professionals are experts in the field. They not only have a background in finance, but they have also been educated extensively about mortgages and how they affect consumers. They have had over 400 hours of intense education on the subject of mortgage planning. In order to achieve CMPS certification, a mortgage specialist must have proven that they have an in depth understanding of the five core skills that the certification curriculum teaches.

The first skill these professionals must exhibit is the ability to analyze the financial market and its affect on the interest rate. This means that these professionals are able to look at current market trends and analyze what is going to happen with the interest rate. This can be critical if you are applying for a mortgage, because they will be able to anticipate if the interest rate is going to rise, thus allowing you to lock in a lower rate early in the application process. Of course, no one can completely predict what will happen in the nation’s financial market, but this education is helpful in guiding you towards the right mortgage decisions.

The second skill that a certified mortgage planning specialist must have is cash flow and debt analysis. These professionals will look at your existing income (cash flow) and analyze how much debt you can truly handle. This keeps you from borrowing more money than you will realistically be able to pay back. Also, by carefully structuring your mortgage, a CMPS can help put more cash back into your budget, while still building equity in your home.

The third skill that these individuals must prove adept at is real estate equity management advising. A CMPS will be able to walk you through the process of building equity in your largest, most important investment – your house. That leads to the fourth skill set, which is real estate investment planning. A CMPS will be able to help you plan the best way to use your home and your mortgage as a long-term investment. Also, a CMPS will be able to provide you with a plan to get out of your largest debt as quickly as possible, using it as an investment, rather than a drain on your budget. This professional will also be able to help you plan the best time to pay off your mortgage based on your individual situation.

Finally, in order to be a certified CMPS, a mortgage professional must prove competent when it comes to mortgage and real estate taxes. Again, this skill allows this individual to be able to advise you properly when it comes to the taxes you will be paying on your home. With these five skills, CMPS professionals can help increase the amount of cash flow you have after purchasing your house by structuring your mortgage in the most favorable way.

Are you considering investing in real estate? Then a certified mortgage planning specialist is the advisor you need. With the expertise these individuals have about real estate taxes and market trends, they will be able to advise you about the best places to purchase investment properties and how to quickly turn them around for a profit. They also know what mortgage traps to avoid when you are investing in real estate.

So which is a better choice, a loan officer or a certified mortgage planning specialist? Both of these professionals will be able to set you up with a mortgage to purchase your new home. However, if you want to ensure that you get the perfect mortgage for your unique needs, and if you want to build a relationship with an industry professional that will be able to advise you about all of the steps you take with your mortgage, then you will want to consider a certified mortgage planning specialist.

A mortgage loan modification is simply an arrangement through which you get to ‘change’ you mortgage loan repayment terms. The terms in question here include the size of repayments, the regularity of the repayments and hence the total mortgage loan repayment period. It is usually done in the face of new emerging circumstances that make is impossible for you to keep up with the previous terms that you had initially entered into with the mortgage lender.

The mortgage loan medication is not very much unlike a mortgage refinancing arrangement. The difference between the two, however, lies in the fact that mortgage refinancing involves taking up a new loan, whereas in a mortgage loan modification, you keep the original loan, and only modify your repayments for it.

There are a number of ways through which a mortgage loan modification can help you. For one, through the mortgage loan modification, you have a way of protecting yourself from an embarrassing foreclosure: which would inevitably be the end result of your not keeping up with mortgage payments, if you decided to do nothing about it. Therefore if the financial problem you are facing is temporary, and you are already doing something about it, you can use the mortgage loan modification strategy (like where your month repayments are reduced a bit, with the total mortgage loan repayment period extended) as a way of shoring yourself through the transition period. Indeed, there are even some mortgage lenders who are willing to let you stop paying them for a while (typically a predefined period of time), and then start repaying them at the end of that period. The period in question could be the grace period between your starting a business and your starting to earn profits out of it. The period in question could also be the period between your losing your job and getting another. Upon the end of the period in question, and hopefully the improvement of your financial situation, you can start repaying your mortgage in larger installments or have the mortgage repayment period extended, so as to make up for the ‘lost time’ in either case.

Of course, the mortgage-loan modification also offers you a way of saving your credit score from ruin. In the event of your getting into situations where you cannot keep up with your mortgage obligations, and your deciding to do absolutely nothing about it, you could end up with a very huge blot on your credit record. This could translate to a very difficult financial future, where you can’t find any credit facilities. Thankfully, this is something you can save yourself, through the use of mortgage loan modification.

It is worth noting, of course, that not every mortgage provider will find the idea of mortgage modification agreeable. Yet it doesn’t help for you to jump into conclusions before even trying out something. There is no harm, in the event of your finding yourself unable to keep up with your mortgage obligations, to ask your mortgage provider whether a mortgage modification is something they would consider. Chances are that as long as it not totally against their policy, and you can show them how it is in their best interests to modify your mortgage, they will buy your request.

This article summarizes the differences between conventional and government loans for first-time buyers, homeowners looking for mortgage refinancing, and those looking to cash out on equity for loan consolidation, debt consolidation or home improvement through home equity loans (second mortgages).

Conventional Mortgages

o Not guaranteed or insured by the Federal Government.

o Features 0% to 20% down payment options.

o Usually fixed mortgage rates for 15 to 30 years or adjustable rate mortgages (ARMs).

o Maximum conforming limit is $417,000. Otherwise, it’s a jumbo or non-conforming conventional loan.

Government Mortgages

o Insured against default by the Federal Government, making qualification less stringent:

- FHA loans are insured by the Federal Housing Administration.

- VA loans are guaranteed by the Department of Veteran Affairs.

o FHA loans require 3% down payments and are 15 and 30 year fixed rate loans or 1 year ARMs.

o VA loans are only available to eligible veterans or surviving spouses of deceased veterans.

o No down payment required–up to 100% financing allowed.

o Maximum loan amounts for government loans are set geographically.

o Mortgage refinancing into government loans is only available to existing holders of government mortgages.

Stated Income Mortgage Loans

“Stated-income mortgages are for people who make the money they say they make, but that amount doesn’t show up on the bottom line of their income taxes,” says Hugh McLaughlin, president and CEO of KMC Mortgage Services Inc., a lender and broker in Naples, Florida. They are non-conventional loans with higher rates than conventional mortgages–borrower interest rates depend on several factors: income stability, debt-to-income ratio, credit score, down payment and property appraisal value. Stated income mortgages can be 15 or 30 year fixed rate loans or adjustable rate mortgages.

President Obama knows that homeowners everywhere are struggling financially, and has enacted his $75 billion “Making Home Affordable” plan. This plan will give a homeowner the chance to refinance or get a home loan modification into a fixed rate 2% mortgage.

Foreclosures are at an all time high, and more are expected, but thus plan will help millions of homeowners facing foreclosure or other financial problems save their home. With the economy and housing market in such bad conditions, the mortgage bailout plan from Obama will reduce foreclosures and save homeowners. This will help restore some market stability and prevent home values from dropping even further. Many homeowners actually owe as much as 5% more on their mortgage than their home is worth. Luckily for these homeowners, this “Making Home Affordable” plan from Obama will allow them to refinance or get a loan modification even if they owe more than their homes market value. Situations like this would have been very hard to be approved for when looking into getting a mortgage refinancing or modification, but now with Obama’s plan, more homeowners than ever are eligible.

A large part of the over $75 billion dollars in this plan will be used to give cash incentives to mortgage lenders and banks who approve at risk homeowners, or those who are going to lose their home due to foreclosure a mortgage refinancing or modification. This means that with the risks of approving at risk homeowners is minimized and mortgage lenders and banks are approving more homeowners than ever before.

Homeowners who have attempted refinancing or mortgage modification, only to be turned down, should try again using the guidelines set in President Obama’s “Making Home Affordable” plan. The savings that can be had are easily in the hundreds of dollars per month, or it may also help you avoid foreclosure or mortgage default. Call your lender today and see the potential savings to be had through refinancing or home loan modification.

You might have had an approved mortgage loan modification that does not seem to be low enough for you, or it might not be to your liking. You could be one of those homeowners that received a mortgage loan modification offer and fall into that category. Do not be so quick to turn down a mortgage modification offer before you have fully reviewed it. In some cases I advise my clients to seek a lower mortgage payment but it depends on the circumstances, each case can be different.

Lets face it, a mortgage company is not always looking to give you the lowest possible mortgage loan modification available. Sometimes they offer mortgage loan modification that do not appear to be a real good offer. For example, lets say you are 6 months past due on your mortgage payments and your monthly payments are $2000 a month, with a remaining 25 yrs on your mortgage, and your mortgage company offers you’re a loan modification for $1700 a month for another 30 yrs, but you turn them down.

In some cases it is not a bad idea to take them up on their offer because accepting their offer and complying with them you would have brought your mortgage current, and you now have a lower mortgage payment. Your payment might not have been lowered very much compared to what it was, but not having to deal with the outstanding $12,000 in missed payments and possibly other expenses you might have incurred might not be a bad offer for you; but there are other factors to take into consideration such as the new interest rate, whether it is fixed rate interest or not, and how long the new payments terms will be for. I advise homeowners of the offers that they should accept once we receive them, and the ones they should turn down once we get mortgage loan modification offers from lenders. I might be less likely to accept an offer if we take the example from above, but lets say the homeowner is 2 months past due instead of 6 months, and they were going to lower the mortgage payments for $2000 to only $1900 a month and my client would have to sign up on another 30 year mortgage loan with a low 5 yr fixed rate interest that will begin adjusting starting in the 6th year of the mortgage, and adjust twice a year for the remaining 25 yrs of the mortgage. Something like that I would advise against for any of my clients.

The reason why I would not go with the last offer is because there are too many variable in the new loan to accept, and the benefits are really not that attractive. The homeowner might benefit better by doing a repayment plan, short sale, or a deed-in-lieu of foreclosure in the long run than they would by accepting a loan modification with little benefits.

A borrower can challenge a loan modification offer and get a positive outcome, but that is not always to the case, it is a gamble once a lender has placed an offer on the table. First of all, if a borrower is going to challenge an offer made to them, it are going to have to turn down the original offer and hold out for something better. Holding out for something better does not always work out in a homeowners favor, and they could have turned down their offer, and not be offered anything else. Plus, they would lose the offer that was extended to them earlier. Just choose your battles wisely. We have an awesome mortgage loan modification program that is very effective and extremely inexpensive that gives any homeowner with no experience a start to finish approach with modifying their home. Or you may consult to professional for mortgage help, but seeking a professional’s time and efforts can be costly at times. If you get offers think and talk it over with others before making a decision you could ultimately regret.