Posts Tagged ‘Home Loans’
Buying Your Dream Home
January 12th, 2010
David Riewe asked:
Even though it’s not easy for everyone to buy a home, it is in fact easier than ever to get a home these days with most lending agencies and banks being more liberal than ever with providing home loans and mortgages. Even if you don’t have a lot of capital or a lot of money to put down, you can still get the home of your dreams at a very affordable price.
A lot of us think that buying a home is a tough process, needing a large down payment, although this isn’t always the case. Buying a home largely depends on your budget. If you put a down payment on your home purchase, it will go towards your overall purchase. The more money you put down on a home when you purchase, the lower your monthly payments will be.
Those of us who don’t own a home live in rental houses and apartments. This can be a worthwhile solution, although your still paying money towards your housing that you could instead be putting towards a home of your own. Owning a home is a dream for many of us, especially when it comes to that dream home that we all hope to own one day. Apartments and homes are great to rent – although most these days will cost you just as much as a mortgage payment – which doesn’t make any sense at all.
Instead, you can easily convert your rental payments into monthly installments towards your own home. All across the United States, you can find of lot of banks and lenders that offer easy to get loans for purchasing your own home or real estate property at low interest rates. With a lot interest rate, you can get the home of your dreams and enjoy low monthly payments.
Keep in mind, you need to choose a loan plan that’s best for you. You can go through bank, through a lender, or use a service online. There are many different ways that you can go, although real estate agents seem to be the most common now days. Good real estate agents will be more than willing to help you get a great deal on the home, at prices that are right for you. Anytime you buy a house, you should always plan ahead, get yourself a real estate agent, and then pursue your dream home.
If you plan your budget and take things one step at a time, you’ll be closer than you think to the home of your dreams. If you choose to keep renting and pay money toward something you don’t own – the home of your dreams will continue to slip away. Take action now and stop renting – find the home of your dreams and put your money towards owning it instead.
Even though it’s not easy for everyone to buy a home, it is in fact easier than ever to get a home these days with most lending agencies and banks being more liberal than ever with providing home loans and mortgages. Even if you don’t have a lot of capital or a lot of money to put down, you can still get the home of your dreams at a very affordable price.
A lot of us think that buying a home is a tough process, needing a large down payment, although this isn’t always the case. Buying a home largely depends on your budget. If you put a down payment on your home purchase, it will go towards your overall purchase. The more money you put down on a home when you purchase, the lower your monthly payments will be.
Those of us who don’t own a home live in rental houses and apartments. This can be a worthwhile solution, although your still paying money towards your housing that you could instead be putting towards a home of your own. Owning a home is a dream for many of us, especially when it comes to that dream home that we all hope to own one day. Apartments and homes are great to rent – although most these days will cost you just as much as a mortgage payment – which doesn’t make any sense at all.
Instead, you can easily convert your rental payments into monthly installments towards your own home. All across the United States, you can find of lot of banks and lenders that offer easy to get loans for purchasing your own home or real estate property at low interest rates. With a lot interest rate, you can get the home of your dreams and enjoy low monthly payments.
Keep in mind, you need to choose a loan plan that’s best for you. You can go through bank, through a lender, or use a service online. There are many different ways that you can go, although real estate agents seem to be the most common now days. Good real estate agents will be more than willing to help you get a great deal on the home, at prices that are right for you. Anytime you buy a house, you should always plan ahead, get yourself a real estate agent, and then pursue your dream home.
If you plan your budget and take things one step at a time, you’ll be closer than you think to the home of your dreams. If you choose to keep renting and pay money toward something you don’t own – the home of your dreams will continue to slip away. Take action now and stop renting – find the home of your dreams and put your money towards owning it instead.
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Obama’s Federal Program Bringing Home Loans into Reach of First Time Home Buyers
December 16th, 2009
Bryan Hendersen asked:
Economic weakness threatens the chances of many Americans to become homeowners and so threatens the nation’s ability to thrive as a nation. Keen to help, the federal government offers the First Time Home Buyer Stimulus Package. It targets first time buyers and those who have not owned a home in three or more years.
Purchases under this program are of pre-owned homes and homes in the new construction phase, stimulating demand in the housing market. Whether indirectly, by boosting buys of pre-owned homes, or directly, by boosting housing starts, this gives builders and their crews more work. As for homeowners, they receive help in three ways, with tax credits, assistance with down payments, and with decreased interest rates.
The initial purpose of the stimulus program was to stave off the economic slowdown of which existence became apparent during the financial crisis of 2008. The developing situation demanded reinforcement of these efforts, which came in the form of a more comprehensive plan from the federal government. In particular, the Obama administration believed that the reluctance to spend money came from the fear of losing home ownership. This, along with the collapse of real estate market, convinced to administration to act to stimulate home ownership.
For any purchase made in the year 2009, a homebuyer may qualify for a 10 percent tax credit. This may for up to $8,000, with the basis being the gross purchase price. The home owner may claim this credit either the year of purchase or within two years of purchase. This tax credit provides money to the homeowner, which he may decide to save.
Next is a reduction in the down payment. Usually, these are at least ten percent of the home’s price. The government plan is to pay off part of the down payment. Lower down payments make it easier to purchase the home. Furthermore, reducing the down payment reduces the burdens keeping you from placing money in an investment account or from improving the new home. Also, government help may reduce the interest rate on your home loan by reducing the basis points on the interest rate. Qualification for the tax credit requires that a single person’s income not exceed $75, 000 and that with a partner income not exceed $150,000.
A third way to encourage home purchases is a tax rebate. In this case, the federal government places the rebate on the amount of interest assessed on the loan. This is not related to the tax credit. Under this stimulus program, homeowners may apply for both the credit and the rebate. Landlords, who buy property for income purposes, may qualify for the rebate. Because the landlord’s maintenance expenses go to the upkeep of the rented property, they are eligible for income tax deductions. Hence landlords are eligible for the rebate.
Economic growth is impossible without continuous improvement of the national infrastructure. However, the collapse in the demand for housing hits precisely here. The Obama adminstration intends to rectify this with tax credits, down payment assistance, and interest rate reductions. Under the First Time Home Buyer program, it intends to place buyers in new homes and stimulate economic activity.
Economic weakness threatens the chances of many Americans to become homeowners and so threatens the nation’s ability to thrive as a nation. Keen to help, the federal government offers the First Time Home Buyer Stimulus Package. It targets first time buyers and those who have not owned a home in three or more years.
Purchases under this program are of pre-owned homes and homes in the new construction phase, stimulating demand in the housing market. Whether indirectly, by boosting buys of pre-owned homes, or directly, by boosting housing starts, this gives builders and their crews more work. As for homeowners, they receive help in three ways, with tax credits, assistance with down payments, and with decreased interest rates.
The initial purpose of the stimulus program was to stave off the economic slowdown of which existence became apparent during the financial crisis of 2008. The developing situation demanded reinforcement of these efforts, which came in the form of a more comprehensive plan from the federal government. In particular, the Obama administration believed that the reluctance to spend money came from the fear of losing home ownership. This, along with the collapse of real estate market, convinced to administration to act to stimulate home ownership.
For any purchase made in the year 2009, a homebuyer may qualify for a 10 percent tax credit. This may for up to $8,000, with the basis being the gross purchase price. The home owner may claim this credit either the year of purchase or within two years of purchase. This tax credit provides money to the homeowner, which he may decide to save.
Next is a reduction in the down payment. Usually, these are at least ten percent of the home’s price. The government plan is to pay off part of the down payment. Lower down payments make it easier to purchase the home. Furthermore, reducing the down payment reduces the burdens keeping you from placing money in an investment account or from improving the new home. Also, government help may reduce the interest rate on your home loan by reducing the basis points on the interest rate. Qualification for the tax credit requires that a single person’s income not exceed $75, 000 and that with a partner income not exceed $150,000.
A third way to encourage home purchases is a tax rebate. In this case, the federal government places the rebate on the amount of interest assessed on the loan. This is not related to the tax credit. Under this stimulus program, homeowners may apply for both the credit and the rebate. Landlords, who buy property for income purposes, may qualify for the rebate. Because the landlord’s maintenance expenses go to the upkeep of the rented property, they are eligible for income tax deductions. Hence landlords are eligible for the rebate.
Economic growth is impossible without continuous improvement of the national infrastructure. However, the collapse in the demand for housing hits precisely here. The Obama adminstration intends to rectify this with tax credits, down payment assistance, and interest rate reductions. Under the First Time Home Buyer program, it intends to place buyers in new homes and stimulate economic activity.
Home Loan Modifications Explained
May 27th, 2009
Brian S. Icenhower asked:
Continuous declines in United States’ housing values after the mid-2000s caused an increasing number of borrowers to explore the loan modification process in an attempt to avoid losing their homes to foreclosure. Unfortunately, a large number of homeowners who sought to have their loans modified were thwarted by lengthy and impersonal negotiation processes imposed by lenders, the borrowers’ inability to qualify for modified loans, and the unwillingness of banks to modify loans to affordable levels. In addition, too many of the borrowers who were able to successfully navigate through the loan modification waters later learned that their diligent efforts were ultimately in vain as the United States Comptroller of the Currency reported that over half of the loans modified in the first quarter of 2008 went into default within six months. In order to prevent the loan modification process from beginning to resemble a futile quest for the Holy Grail, it is essential to examine some of the key issues surrounding loan modifications.
Loan Modification Goals
Generally speaking, the primary reason that borrowers seek to have their home loans modified is to reduce the amount of their monthly payments. This result can be achieved by reducing the interest rate of the loan, extending the repayment period of the loan, preventing an interest rate from adjusting upward, reducing the principal balance owed, eliminating a negative amortization term, adding delinquent payments to the balance, or any combination of the aforementioned. It is not surprising that the modification goal most sought by borrowers also happens to be the request lenders have been most unwilling to grant: principal balance reductions. Although reductions in balances create significant losses for banks, it should also be noted that homeowners have been generally unwilling to continue to make mortgage payments when they believe that their home’s value will not exceed the amount that they owe against the property. Therefore, the failure to reduce balances via the loan modification process, coupled with declining housing values, may account for the U.S. Comptroller of the Currency’s finding that the majority of loans become delinquent shortly after being modified.
The Process
Although loan modification procedures and requirements vary from bank to bank, the typical process begins with a borrower contacting the bank’s loss mitigation department to request a loan modification. The lender will then send a loan modification application and forms to the borrower to be completed and returned to the lender. The bank will also require other documentation to be provided by the borrower in support of the application. This documentation may include bank statements, tax returns, pay stubs, a hardship letter and an appraisal or broker’s price opinion to show the current value of the property. After all of the requested documentation has been received by the lender, a bank representative or negotiator will eventually contact the borrower to make a proposal of the new loan terms or simply reject the initial modification application altogether. The borrower then either accepts the bank’s proposal or negotiates new terms until an agreement is reached and new loan documents are formally executed. It is also advisable for the borrower to regularly contact the loss mitigation department throughout the process to ensure that all documentation is being received and that the modification request is proceeding in a timely fashion.
Obstacles to Modification
The most obvious obstacle to successfully modifying a home loan is the borrower’s inability to qualify for the new modified loan. Once again, lender eligibility requirements for modification can differ greatly. However, Fannie Mae and Freddie Mae have implemented a Streamlined Modification Plan to more effectively respond to the increasing number of loan modification requests. Under this plan, the borrower must satisfy the following criteria: 1) the borrower has not filed bankruptcy; 2) the borrower’s existing loan was originated prior to January 1, 2008; 3) the property securing the loan is owner-occupied and a single family residence; 4) the borrower is at least 90 days delinquent on the existing loan; 5) a 90% or higher loan-to-value ratio is present with the existing loan; 6) the payments after modification do not exceed 38% of the borrower’s gross monthly income; and 7) the borrower must successfully make 3 consecutive monthly payments after modification to demonstrate an ability to pay before the modification is formalized.
Also, lenders are generally under no legal obligation to modify loans for borrowers. Consequently, if a modification request becomes too cost prohibitive, banks will often take their chances with the foreclosure process instead. Lenders may also have inadequate staffing to handle the increasing number of modification requests without frequent borrower follow-up. A borrower’s property might also serve as security for more than one loan, and it can often be challenging to coordinate modification terms between multiple banks. Further, if the loan has been sold by the bank on the secondary loan market to any number of potential investors, the original loan will often be split into different fragments before pooling them with other portions of loans as mortgage-backed securities. In this case, it can be very difficult to coordinate with the many investors to obtain approval for the modification.
Finally, borrowers should be weary of a large number of fraudulent companies attempting to assist homeowners with the loan modification process. The mere fact that these companies are using seemingly reputable television commercials or websites as advertising mediums should not alleviate a borrower’s concerns. The rapidly increasing number of loan modification scam-artists has temporarily caught law enforcement off guard and it may take some time before these culprits are apprehended and their brazen actions are quelled. In the meantime, borrowers should be especially cautious when dealing with companies that demand fees in advance of any services to be provided as this practice in and of itself is prohibited by most state laws.
For further assistance with the loan modification process, it is advisable to contact an attorney or your local REALTOR®. In addition, the U.S. Department of Housing and Urban Development has a list of approved housing counseling agencies at www.hud.gov. When a borrower attempts to personally modify a home loan, it is essential to identify modification goals, understand the particular lender’s modification requirements, frequently check on the status of the application’s processing, and by very patient.
Continuous declines in United States’ housing values after the mid-2000s caused an increasing number of borrowers to explore the loan modification process in an attempt to avoid losing their homes to foreclosure. Unfortunately, a large number of homeowners who sought to have their loans modified were thwarted by lengthy and impersonal negotiation processes imposed by lenders, the borrowers’ inability to qualify for modified loans, and the unwillingness of banks to modify loans to affordable levels. In addition, too many of the borrowers who were able to successfully navigate through the loan modification waters later learned that their diligent efforts were ultimately in vain as the United States Comptroller of the Currency reported that over half of the loans modified in the first quarter of 2008 went into default within six months. In order to prevent the loan modification process from beginning to resemble a futile quest for the Holy Grail, it is essential to examine some of the key issues surrounding loan modifications.
Loan Modification Goals
Generally speaking, the primary reason that borrowers seek to have their home loans modified is to reduce the amount of their monthly payments. This result can be achieved by reducing the interest rate of the loan, extending the repayment period of the loan, preventing an interest rate from adjusting upward, reducing the principal balance owed, eliminating a negative amortization term, adding delinquent payments to the balance, or any combination of the aforementioned. It is not surprising that the modification goal most sought by borrowers also happens to be the request lenders have been most unwilling to grant: principal balance reductions. Although reductions in balances create significant losses for banks, it should also be noted that homeowners have been generally unwilling to continue to make mortgage payments when they believe that their home’s value will not exceed the amount that they owe against the property. Therefore, the failure to reduce balances via the loan modification process, coupled with declining housing values, may account for the U.S. Comptroller of the Currency’s finding that the majority of loans become delinquent shortly after being modified.
The Process
Although loan modification procedures and requirements vary from bank to bank, the typical process begins with a borrower contacting the bank’s loss mitigation department to request a loan modification. The lender will then send a loan modification application and forms to the borrower to be completed and returned to the lender. The bank will also require other documentation to be provided by the borrower in support of the application. This documentation may include bank statements, tax returns, pay stubs, a hardship letter and an appraisal or broker’s price opinion to show the current value of the property. After all of the requested documentation has been received by the lender, a bank representative or negotiator will eventually contact the borrower to make a proposal of the new loan terms or simply reject the initial modification application altogether. The borrower then either accepts the bank’s proposal or negotiates new terms until an agreement is reached and new loan documents are formally executed. It is also advisable for the borrower to regularly contact the loss mitigation department throughout the process to ensure that all documentation is being received and that the modification request is proceeding in a timely fashion.
Obstacles to Modification
The most obvious obstacle to successfully modifying a home loan is the borrower’s inability to qualify for the new modified loan. Once again, lender eligibility requirements for modification can differ greatly. However, Fannie Mae and Freddie Mae have implemented a Streamlined Modification Plan to more effectively respond to the increasing number of loan modification requests. Under this plan, the borrower must satisfy the following criteria: 1) the borrower has not filed bankruptcy; 2) the borrower’s existing loan was originated prior to January 1, 2008; 3) the property securing the loan is owner-occupied and a single family residence; 4) the borrower is at least 90 days delinquent on the existing loan; 5) a 90% or higher loan-to-value ratio is present with the existing loan; 6) the payments after modification do not exceed 38% of the borrower’s gross monthly income; and 7) the borrower must successfully make 3 consecutive monthly payments after modification to demonstrate an ability to pay before the modification is formalized.
Also, lenders are generally under no legal obligation to modify loans for borrowers. Consequently, if a modification request becomes too cost prohibitive, banks will often take their chances with the foreclosure process instead. Lenders may also have inadequate staffing to handle the increasing number of modification requests without frequent borrower follow-up. A borrower’s property might also serve as security for more than one loan, and it can often be challenging to coordinate modification terms between multiple banks. Further, if the loan has been sold by the bank on the secondary loan market to any number of potential investors, the original loan will often be split into different fragments before pooling them with other portions of loans as mortgage-backed securities. In this case, it can be very difficult to coordinate with the many investors to obtain approval for the modification.
Finally, borrowers should be weary of a large number of fraudulent companies attempting to assist homeowners with the loan modification process. The mere fact that these companies are using seemingly reputable television commercials or websites as advertising mediums should not alleviate a borrower’s concerns. The rapidly increasing number of loan modification scam-artists has temporarily caught law enforcement off guard and it may take some time before these culprits are apprehended and their brazen actions are quelled. In the meantime, borrowers should be especially cautious when dealing with companies that demand fees in advance of any services to be provided as this practice in and of itself is prohibited by most state laws.
For further assistance with the loan modification process, it is advisable to contact an attorney or your local REALTOR®. In addition, the U.S. Department of Housing and Urban Development has a list of approved housing counseling agencies at www.hud.gov. When a borrower attempts to personally modify a home loan, it is essential to identify modification goals, understand the particular lender’s modification requirements, frequently check on the status of the application’s processing, and by very patient.