Those Who Plan a Strategic Default

Because the prices of homes are falling along with the values, those who were considering selling might have planned to walk away. Those who discovered that they are underwater and see no end in sight, may also very well a prime candidate to plan a strategic default too. Many times, couples learn that they can rent for less, which saves them a substantial amount of money. Joblessness is at an all time high, and if both spouses and partners were working, it changes everything when the household goes down to one income. It is not out of reason to believe that when parents look at their children and have to decide who eats that they would have to come up with some alternatives. 

Reasons That Borrowers Plan a Strategic Default

Those who know that they can get into a home or apartment for less than what they are paying know that they can put money away that they wouldn’t have otherwise. Being able to cut costs is important and necessary, especially in today’s tough economic times. 

The best option is to try and get a modification on your mortgage first to see what the bank can do for you. It will take some time, but they are limited on the amount of time they can spend on getting it together for you. Be sure that they understand everything that you are going through, and anything that they ask for give it to them. They are there to help you, and they can’t fully do their job with missing information. 

If you need more information on how to get started buying a home or refinancing your current home, you can visit www.fhaloansnow.net. You will find a wealth of information there including the requirements for an FHA loan.

Reverse Mortgage Performance is Good Despite the Rumors

While many reports have not shined favorably on the mortgage industry, there is some good news coming forth regarding reverse mortgages. They are doing well, in fact the final numbers rolled out earlier this month from the end of 2010. Believe it or not, there was more than $3 trillion in home equity loans being held by seniors, age 62 and up. When you look at the country’s overall financial picture, it really isn’t all that hard to understand, but it’s sad that seniors are carrying that burden. However, the good part is how the reverse loans are structured, giving them money back in exchange for the property. 

Seniors Make a Sacrifice, but They do Better Financially 

Reverse mortgages enable senior citizens to let go of their home in the end, in return for signing up for a mortgage that makes payments to them. While values are a bone of contention in real estate circles, seniors have fared well in getting these loans closed. There is plenty of counseling upfront to ensure that they understand what is involved, and their family members or caretakers are encouraged to learn about the programs as well so that they can be of assistance should the need arise. While the children might fear they won’t get the property, in some cases it might be the best thing for their parents. This is especially true at a time when values are going down, and there may not be much of a profit regardless on the home. Making the equity work for them is what it’s all about, and it’s doing well.

Equifax Says Credit is Growing!

In the month of March, the report from Equifax showed that credit was growing and on the rise. This is great news, and tells us that people are being more money savvy than they have been in the past. The trend absolutely shows new growth in credit, and those who got back into the game by repairing their credit are thrilled and ready to move forward and buy a home or refinance for a better rate before the changes come. Home equity loans are growing, auto loans are growing, and consumer finance in general is growing too. 

Beating the Odds is Always Favored 

It’s always good to beat the odds, and although many were sure that they wouldn’t be able to sustain the changes, it has made Americans stronger and more determined than ever to clean up their credit and create a whole new portfolio of spending power. This time around, borrowers are wiser and smarter, and they know what it takes to earn that buying power. Hats off to those of you who have worked so hard to make changes and make things happen, you will find out very soon that it was well worth all the hard work and effort you put into it.

More Modifications and Principal Reductions in 2011

Those of you who do not know what a mortgage modification is are going to get a crash course today. They are simply a reassessment of a homeowner’s mortgage, in which their loan is evaluated against their income and other debts, to see where they fall and if any changes can be made to make it more affordable. The benefits of this are twofold: 1) it helps homeowners keep their homes, and 2) it helps homeowners avoid considering a foreclosure or even a short sale. 

With anything there is a risk, or possibly a shortcoming, and in this case the shortcoming is that modifications don’t always work. Ideally, they are looking to get someone’s debt to income ratio to at least 31% total, but with the level of debt most Americans have, that isn’t always possible. In fact, only 9% of modifications are approved, which leaves a large percentage of people out there looking for other options. 

The Purpose of Principal Reductions 

Principal reductions are certainly helpful in an economic downturn, where the values of homes are falling and taxes are going up. A principal reduction is beneficial for those who aren’t struggling with their payments, because its benefits are two-fold as well. The reduction in principal means that not only would the principal balance go down, but those who are upside down in their mortgage would nearly breakeven, or in some cases they would be on benefit from owing less even though they are in the positive right now on value.

Either way, these changes would be good for our economy, and great for the homeowner. It almost seems that it would make us look stronger as a whole across the country, but naturally nothing is free and there are always concerns with any changes that are drastic.

You can find out more about getting a better loan, or a purchase loan by going to www.fhaloansnow.net. You will get the help you deserve with a professional mortgage banker and a realtor. 

-Mayer Dallal

First Time Homebuyer Purchases are Best Done FHA

The best way to go when buying a home for the first time is FHA.  FHA purchases are great for many families because they provide low down payments of 3.5%, and up to 6% in seller concessions.  This can work out great for a lot of reasons.  Low down payment is one reason, and the keeping your overall mortgage payments low is another. Those who wish to take advantage of this option need a credit score of a 640 or higher, and those with a lower score may need to put down more but are still considered. 

FHA is also good when you are worried about getting qualified for a new loan.  FHA does not guarantee loans based on all credit, but they do look at your current pay histories.  Paying more than 30 days late on debts isn’t favorable, and those who have failed to re-establish credit after a bankruptcy are frowned upon.  They want to help, but with any good thing there are limitations.  These are simply guidelines and with a little help you can improve your financial picture for the better. 

-Mayer Dallal

www.fhaloansnow.net

Considerations When Refinancing and Assessing Your Debt

When trying to determine what current obligations you have, be sure to include any existing mortgages on the home, so this mean you’re first and second.  In addition, consider any other debts you have outside of that.  If you have a line of credit that was used for any other purposes other than repairs or appraisals, then this loan won’t be eligible to pay off.  

Keep in mind that when you are looking at your payoff amount, the actual pay off is going to include any unpaid interest until the end of the month, and it will also include any early payment penalties.  If you aren’t sure what that is and you just want to ask, be sure to call the servicer of your current mortgage and they would be glad to help you.  

If you are looking to get cash out loan, then you can take up to 85% of your home’s value.  That will allow you to even borrow on a property that you have owned for a year provided you don’t go over that 85%.  Just keep these factors in mind so that you have a realistic expectation of what is going to happen during the process and what you will walk away with at closing.  

-Mayer Dallal

www.fhaloansnow.net