Risks on FHA Loans: Lessons from the Subprime Market
As the gavel came down on recent Mortgage legislation, it appears that the Federal Housing Administration gains increasing power by the day. While many believe that the government becoming more active in the mortgage market will help lower the playing field for lower income borrowers by increasing regulations on subprime lenders, there are others who are a bit concerned about the increase in FHA powers.
While we remain neutral on the issue of government intervention (we’re in this for you), we need to take inventory on what the growth of FHA originated loans actually means. After all, government activity will only really benefit everyone if its demonstrably better than the sub prime market it is regulating. Read more
Where to Find FHA Lenders and What to Know About the Programs
In today’s difficult financing market, working with an FHA-backed lender can be a great way to get the loan that you need. The Federal Housing Administration (FHA) offers insurance for lenders to refinance loans by guaranteeing the principal of the loan for borrowers who meet the guidelines.
While FHA lending requirements allow for imperfect credit, their standards have been tightening lately, as the program was designed to be self-sustaining and must maintain solvency as a stand alone entity.
To find a lender who works with FHA-backed loans you should search for the exact criterion for you loan on this HUD FHA Lender Search Form.
The form allows you to specify your location, as well as the type of mortgage you are looking for (either Title I, which is for property improvement to existing homes or the standard II mortgage refinancing programs.) Further, you can further specify your search according to the exact program that you need, including reverse mortgages and 203K Rehabilitations. Read more
Historical Perspectives on Recession Markets
Reading the news today, it may seem like today’s financial difficulties are unprecedented. Based upon the actions by the Federal Government, there often seems no precedent for many of the recent changes in the regulatory environment.
What is interesting is that, if you look a bit deeper, it seems that what we’re witnessing in the markets follows similar patterns to other structural recessions in the US economy. In part, the growth of modern finance has made the effects of the recent mortgage crisis more widespread while the expansion of modern media has made the public more aware of its implications. Read more
How to Negotiate a Smart Short Sale
If you find yourself in a difficult financial situation with your current mortgage in today’s market, take a step back from all of the noise to reflect upon your situation. At each point in your financial history, you made the decision that you believed would best help you realize your goals.
Because nobody has perfect foresight into our future income, or the property market generally, it is only natural to come to re-evaluate your current debt situation. One option for home owners are short sale negotiations, which may allow you to sell your home to satisfy the existing loan. Read more
Strategies to Obtain a Mobile Home Loan in Today’s Market
Life on the road can be quite exciting – there’s nothing quite like exploring the texture of America through its wandering highways and varied landscapes. With a traditional home, you may feel a bit constrained and anchored to your existing town.
In order to inject some adventure and mobility into their lives, a growing number of potential home owners are seeking out mobile home options. With a mobile home, you retain the ability to potentially transfer your home at some point in the future to a new location, and you can also use the money you save to truly enjoy your new settings. Read more
How to Qualify for a Manufactured Home Loan
Imagine yourself ten years from now: likely, you want to be in a comfortable position, enjoying life along with those whom you love. There are many options for finding a home to help you realize this goal in your new home. In addition to traditional home ownership options, you may want to consider manufactured home options.
When you traditionally think of manufactured homes, you may have images of constricted space, but, with advances in manufacturing technology, perhaps you should revisit those assumptions: new manufactured homes can be as spacious and comfortable as tradition homes at a lower cost and with mobility advantages.
As the Washington Post recently reported (see http://loudounextra.washingtonpost.com/news/2008/aug/26/reinventing-mobile-home-changing-market/), manufactured homes are on the cutting edge of the housing market, with improved energy efficiency and luxury features that would make many traditional home owners blush.
Before you rush out to purchase a manufactured home, there are a number of factors to take into consideration. Since you’ll need to finance your manufactured home purchase, it’s important to understand the entire qualification process.
Firstly, you’ll want to ensure that your property complies with the (get ready for a truly great government naming convention…) Federal National Manufactured Housing Construction and Safety Standards Act (whew.) In particular, you’ll want to first ensure the home was manufactured since 1980, as older homes may have difficulty qualifying for loans, and, moreover, they may have a truncated life span.
According to the Standards Act, administered by HUD, the house must be installed in sections to ground it to the site (you’ll need to file a 433A to verify this.) Further, you’ll need to meet the HUD construction codes, and pass a 3rd party site inspection for the property.
After the home has qualified for the HUD conditions, you should ensure that you have a lien-free ownership, or a cooperative agreement for ownership in a manufactured home park. Either way, you must be the owner of the property, whether alone or in collaboration, in order to qualify for the loan. Further, you must have property rights to the lot upon which the manufactured home is installed – 3rd party ownership will be considered a lien in many cases.
Not only must the home be grounded but it should serve as the primary residence within six months of signing the loan agreement, so if this is a 2nd home you may not qualify for standard manufactured home loans. Finally, if you are entering a cooperative ownership agreement with a park, then you should expect to have a long-term lease on the land for at least five years, so if mobility is your goal then you should seek land ownership.
In addition to the qualitative requirements, your credit score will be important in determining the type of loan you are able to qualify for – applicants with scores over 600 with fair best in today’s market, although lower scores may qualify with higher down payments and interest rates.
The average loan requires roughly a 10% down payment, although this is shifting in today’s environment. Still, choosing a manufactured home might be a smart choice to give you the flexibility to realize your home ownership goals in the current market.
What Is Holding a Mortgage?
Holding a mortgage means that, instead of selling a house to a seller who has gotten a loan from the bank, you instead arrange to receive monthly payments from them directly until the house is paid off. There are a few different sides to holding a mortgage, and we will explore several of them here. First off, holding a mortgage appears as undesirable to many people because instead of receiving a large lump sum right away, they get monthly payments over time. But then again, if you get payments instead of a large sum, you also get to earn interest. This interest would be a better return than what you would get putting the money into a savings account, so for this reason, some people like the idea of holding a mortgage.
Holding a mortgage is definitely a risk. If the buyer falls behind on the payments, then you can always foreclose and resell the house. However, you run the risk then of the occupants trashing the house. If you need to make costly repairs, you will spend money on that. Also, remember that money value changes, so the money that you would make in one large lump sum might be better invested than money gained over time.
Most of what causes people to decide on holding a mortgage lies with the situation, and whether or not they need, or want, a large lump sum of money up front. It is also pretty common to see a relation hold a mortgage if selling property to a family member.
What Are the Best Mortgage Interest Rates in New York?
If you live in New York, then you have no doubt been wondering what the cheapest interest rates are in your area. Whether you are looking at buying a new house, or looking to refinance, finding the right interest rate can often make or break the deal that you want to make. Even a small difference in interest rates can make a huge difference when it comes time to make those monthly payments which is why finding the best mortgage interest rates is an absolute must for anyone undertaking this big step.
Here are some of the best interest rates being offered in New York. Hopefully, you can find the perfect deal for you! First, M.T.G Capital is offering a rate of 4.750% with a 4.977% APR. This is a great deal, and is one that you should definitely consider looking into. Other good ones include TrustCo Bank, who is offering a rate of about 5.525% with a 5.555% APR, and HSBC Bank USA, who boasts a deal now in which you can get a rate of 5.250% with a 5.281% APR. There is also Emigrant Savings Bank, who is offering a 5.476% APR on rates of 5.375%. Also, keep in mind that these numbers do not necessarily reflect official numbers from these companies, and that they are subject to change on a daily basis. This is merely to show you a ballpark figure of what you can look for in the New York area as far as mortgage interest rates go.
Help to Avoid Short Sale
If a borrower is in dire financial straits, he or she may be unable to make the house payment. Before such an individual misses a number of payments resulting in the bank foreclosing on the property, other options must be considered.
The first viable course of action that a borrower must undertake is to attempt to keep the property by talking to the lender. A loss mitigation department is one of the entities that may be able to help. Keep in mind that the contact details on payment vouchers may be those of the customer service provider, and not the investor or lender of the loan. An owner must contact the appropriate people and explain the details as to why payments on the property have been missed, or will be missed in the future. Many homeowners possess the mindset that they cannot work with the lender to resolve the issue. The lender needs the money from the payments, and not the property itself.
Loan modification, or restructuring of the payment scheme and terms, is one option that a property owner should consider taking up with the lender. Loan refinancing is not always necessary. Loan modification will only serve to modify the existing loan’s terms. All of an owner’s credit and other relevant financial information will be open to examination and scrutiny by the lender before the borrower can be approved for this process. The loan balance may be augmented with the amount of any missed payments. The borrower needs to sign his or her name on documents for the agreement before changes to the monthly payment take effect.
A repayment or special forbearance plan may serve to mitigate the effects of a homeowner’s missed payments. If a borrower can currently afford to shell out money for payments, but was unable to pay for a number of payments in the past, this option is feasible. Foreclosure may be delayed by the insurer, investor, or lender if the individual promises to make up for the defaulted payments. All pertinent financial details must be submitted by the borrower before his or her case is studied for approval. The current amounts for payment will incur additional amounts from the missed payments up to the point that the account returns to a good standing.
Can You Get a Mortgage While in Chapter 13 Bankruptcy?
You may be able to get a mortgage loan while you are still in Chapter 13 bankruptcy but the chance is quite small because most lenders and bankers would simply ignore your application when they see that you are in bankruptcy. Filing for bankruptcy should only be considered as the last resort when a person finds himself facing a lot of credit problems. However, in certain situations, it may be the only choice.
The two common kinds of bankruptcies that can be filed are Chapter 7 and Chapter 13. A Chapter 7 bankruptcy has been filed through the courts and will erase all existing debt. However, from the point of view of lenders, this is the worst kind of bankruptcy and it is not removed from your credit report until after 10 years have passed.
On the other hand, a Chapter 13 bankruptcy is where the debtor arranges to make some payments to a trustee. Usually, the debtor agrees to repay a certain percentage to what is due to the creditors. The payment process usually takes five years. Lenders are more lenient for Chapter 13 bankruptcy and the bankruptcy usually remains on the debtor’s credit report for seven years.
For those who have filed a Chapter 7 bankruptcy, banks and lenders usually would ignore any application for a loan for two to three years. However, a person in Chapter 13 may be able to obtain a home loan through the Federal Housing Administration or FHA if the trustee allows it.
There are a number of requirements for someone in Chapter 13 bankruptcy to get a mortgage loan. First of all, you must obtain permission from your trustee and you must find a lender who will agree to finance your FHA loan. Also, you should not have any collections or any late payments after you have filed for bankruptcy. You must also have a payment history of at least one year. For example, you may obtain letters from your utility companies indicating that you have been prompt in your payments for the past 12 months. An important step to take is to get a copy of your credit report to make sure that there are no records of late payments or collections that have been recorded.
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