With the RBA dropping the official cash rate by 50bp, Mark Bouris says that now is the time to shop around for the best deal.
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http://www.PermanentPrincipalReduction.com This is not a loan modification, this is a permanent reduction in your mortgage principal balance. Free initial Consultation.
If you suspect that you may be a victim, and were placed into a Non-Affordable Mortgage, paid excessive fees or were taken advantage of by your Lender, our attorneys and staff will help give you the leverage needed to fight back against the lenders, this leverage will help get you an affordable resolution offer from the lender based on our documented findings.
We take an experienced overview of how and when your loan was originated and serviced as well as the adherence to specific state and federal laws commonly violated to show the probability level of specific statutes that may constitute your loan contract(s) unenforceability by law.
* There Is No Qualifying
* No Debt Ratio Limitations
* No Credit Requirements
* No Income Limitations
* No Hardship Letters
Let us help you today.
We offer a no obligation, free initial consultation to homeowners/investors. We welcome the opportunity to talk with you and to discuss how we may assist in getting you an Affordable Resolution.
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http://www.myfirsthomenewsletter.com/subscribe.php Ever wonder how lender’s come up with the rates they do? You can stop wondering, cause I’m going to tell you how. We all answer to a higher mortgage rate power, namely the secondary market. The secondary market is where Fannie Mae, Freddie Mac, and other mortgage lenders ply their trade. These government founded agencies purchase the loans that lenders make, then either hold them in their portfolios, or bundle them with other loans into mortgage-backed securities.
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http://thegaleteam.com/ LOAN OPTIONSThirty-Year Fixed Rate MortgageThe traditional 30-year fixed-rate mortgage has a constant interest rate and monthly payments that never change. This may be a good choice if you plan to stay in your home for seven years or longer. If you plan to move within seven years, then adjustable-rate loans are usually cheaper. As a rule of thumb, it may be harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan.Fifteen-Year Fixed Rate MortgageThis loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate and you’ll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn’t that great.Hybrid ARM (3/1 ARM, 5/1 ARM, 7/1 ARM)These increasingly popular ARMS also called 3/1, 5/1 or 7/1can offer the best of both worlds: lower interest rates (like ARMs) and a fixed payment for a longer period of time than most adjustable rate loans. For example, a “5/1 loan” has a fixed monthly payment and interest for the first five years and then turns into a traditional adjustable-rate loan, based on then-current rates for the remaining 25 years. It’s a good choice for people who expect to move (or refinance) before or shortly after the adjustment occurs.Adjustable Rate Mortgages (ARM)An ARM is an Adjustable Rate Mortgage. Unlike fixed rate mortgages that have an interest rate that remains the same for the life of the loan, the interest rate on an ARM will change periodically. The intial interest rate of an ARM is lower then that of a fixed rate mortgage, consequently, an ARM maybe a good option to consider if you plan to own your home for only a few years; you expect an increase in future earnings; or, the prevailing interest rate for a fixed mortgage is to high.2/1 Buy Down Mortgage The 2/1 Buy-Down Mortgage allows the borrower to qualify at below market rates so they can borrow more. The initial starting interest rate increases by 1% at the end of the first year and adjusts again by another 1% at the end of the second year. It then remains at a fixed interest rate for the remainder of the loan term. Borrowers often refinance at the end of the second year to obtain the best long-term rates. However, keeping the loan in place even for three full years or more will keep their average interest rate in line with the original market conditions.Annual ARMThis loan has a rate that is recalculated once a year.Monthly ARMWith this loan, the interest rate is recalculated every month. Compared to other options, the rate is usually lower on this ARM because the lender is only committing to a rate for a month at a time, so his vulnerability is significantly reduced.
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ef=”http://peopleschoicehomeloan.com/peoples-choice-home-loan/what-types-of-mortgage-loans-are-there-scottsdale-mortgage-broker#more-296″ class=”more-link”>(more…)
http://www.freemodificationhelp.com/
Click here to schedule a FREE loan evaluation: http://ocgoldmine.com/wheresmyequity/workshops.html
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What are lenders looking for in a modification? What does NPV mean?
When modifications were first introduced, servicers were publishing their “eligibility requirements.” If you can imagine, this caused a number of issues and they eventually stopped. This left the borrowers guessing.
So, what are the servicers really looking for?
There are basically (3) categories of loan modifications: 1. A streamlined servicer-specific modification. 2. A HAMP modification, 3. and a traditional alternative modification
1. Streamlined modifications — this usually applies to selected portfolio loans (where the servicer is the investor), loans belonging to a specific “pool” where there’s either legal pressure or behind the scenes decisions of the investor. There doesn’t seem to be an answer how a certain loan is selected for these programs, but the bottom line is that they are being granted. You’ve heard me talk about CitiMortgage and their Streamlined, limited doc program where many borrowers simply have to sign a packet to accept their new payment.
2. HAMP modification — most lenders will have you initially apply for the “Making Home Affordable” plan. Although the Treasury Department continues with this program, you have to know that is has the lowest success rate near 10%.
3. Traditional Alternative Modification — if you’re loan isn’t eligible for a streamlined modification, you have a better chance of getting approved for a program that is with your specific servicer over the HAMP modification.
Confused enough? Let’s simplify things. Unfortunately, most loans don’t belong to the first category mentioned. That leaves us with mod types 2 & 3, the Making Home Affordable plan, and the Alternative Modification. These are the type of modifications we’ll cover in this video.
After reviewing a whole list of requirements, there are some common requirements.
1. Loan originated on or before January 2009.
2. Borrower is “at risk” of foreclosure. Translation: you’ve missed at least 2 payments.
3. Current payments exceed 31% of gross income
4. Net Present Value (NPV) — this is a financial term used to test whether an investment is worth pursuing or not.
Let’s talk about 3 & 4 in more detail. We need to calculate something in lender’s terms called “DTI”, or Debt-to-income ratio.
This is simply your total housing payment divided by your total gross income.
At your current monthly payment, most of you will satisfy #3 and have your payment exceed 31%.
#4 Net Present Value — is the true hurdle to overcome. As stated in other videos, your servicer must calculate the NPV of a loan with its new modified interest rate. This value must be “positive” from a number of inputs.
Without getting into any fancy math, a good rule of thumb is that NPV will likely be negative if the interest rate is 2.5% or lower, fixed for 30 years. Using a longer term such as 40 years will make the investment even less likely.
With that said, work backward from the formula just given:
Calculate your new principal + interest payment at 2.5% using a mortgage calculator. Use a term of 30 years. When you get your new payment, add your monthly taxes, insurance, and HOA dues, if applicable.
Divide that by your Gross Income.
If the number is greater than .31, a lower interest rate is needed. It’s highly likely you’ll be rejected for a modification.
If the answer is lower than .31, it’s likely that NPV will be positive.
If you fall into the NPV positive category, it’s still not time to celebrate. All this means is that your file appears promising to the servicer. It’s still subject to underwriting and in some cases, investor and mortgage insurance approval.
You can use the mortgage calculator on FreeModificationHelp.com to calculate the formula.
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“Owning a home was once the greatest symbol of the American Dream. And although the American Dream has changed a bit over time, home ownership remains an important part of what it means to be a successful American. But more than just the pride that you can take in having achieved this dream, home ownership gives you a number of other benefits that can ease your daily life and help you prepare for your future. While there are obvious financial benefits to owning your own home (as opposed to renting), there are also other advantages.
Here are some of the advantages of home ownership:
• Tax deductions. There are all sorts of tax deductions which are available to home owners that aren’t available for people who rent. This allows you to save money every single year that you’re a home owner. These deductions include mortgage interest and property tax deductions. There are also certain tax tricks in the future when you sell your home.
• The money that you spend on a home mortgage goes towards a home that can eventually be yours to sell, rent or will to your kids. The money that you spend on rent just disappears to your landlord’s bank account.
• The value of your home will almost undoubtedly increase. There area always ups and downs in the market, but home values across the nation have consistently risen. This means that you’ll be your home today and it will be worth more than you paid for it at some date in the future. And looked at from the other side, the home you’re renting will also be worth more, so your rent can go up in time.
• You can use your home for future loans. When you have some of your home paid off, you are able to access loan money against the value of the home. This allows you to get lower interest rates than you would receive from private loans (or credit cards) which are all that might be available to you as a renter. Even if you don’t get a loan against your home, home ownership improves your credit and makes it easier to get better rates on private loans.
• You own your home so you can make changes to it to really make it yours. When you rent, there are limitations on the changes that you can make at the home. Often, you can’t hang shelving or even paint the walls, so your home lacks personality. Home buyers don’t have these concerns.
Basically, if you think about all of the things that you dislike about renting a home (or apartment), you’ll find that they are problems that disappear when you buy your own home. With home ownership, you’re no longer throwing your money away to a landlord who controls everything about the home. You’re establishing good credit and making a lasting investment. And the truth is, there still is some value to the old American Dream and you can take pride in home ownership.”
Kinan Beck
http://www.articlesbase.com/real-estate-articles/advantages-of-home-ownership-193028.html
My DH and I have an offer on a short sale home, and we went to the bank today to ask some questions about our potential loan and found out that the interest rate for our 30 year fixed loan has increased to over 7%. Today the Fed cut the interest rate to 1.5%. How do those cuts affect people with great credit who want to buy a home?
the cut should bring the rate down not the other way around. This all comes down to how much down you have and how your credit is. You said great but didnt mention a score. My wife and I got a loan this week for a new home and we got 5.85% fixed for 30. our credit scores are both in the 780 region. I would sugges tyou shop around some if your scores are similar.
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