Can a mortgage loan company garnish your wages?

Many people who are losing their home to foreclosure or walking away are worried about the repercussions they may face down the road. From tax issues to possible lawsuits and wage garnishments by their mortgage company, Americans are worried what their future may hold.

Simply put, yes, your lender can possibly file a lawsuit against you and garnish your wages.

In order for a lender to be able to collect on your pay check, they would have to successfully win a judgement against you. The good news is that lenders rarely take homeowners to court and if they do, they can’t take your whole income. Again, the odds are on your side, but no one is immune. (more…)

What is a subordinate mortgage?

A subordinate mortgage is a mortgage that is of a lesser priority, or one that is held subordinate to, a primary mortgage. A good example of this would be a second mortgage, or even a third one. The second mortgage is subordinate to the primary, and the third mortgage is subordinate to both of those, etc. etc.

What this means that if the home goes into foreclosure, the primary mortgage will be paid off first. Then, if there is any money left over, it will pay off the second mortgage. If there is any left after that, it will go to the third mortgage (if there is one)… and so on.  (more…)

How much of my monthly paycheck should go to my mortgage?

This question might seem simple, so you might not like the answer. The truth is that you can put as much towards a mortgage as you can afford to! Some specialists say to stretch… and that building equity is worth the risk to your credit and life situation. Others say to cut back, buying less house then you think you can afford so that you will be alright no matter what your situation is. 

I tend to agree with the latter.

As far as a figure goes, many say that 25% is an ideal amount of your income to spend on debts. This includes a car payment, a mortgage, and whatever other debts you may incur, like credit card payments. This also does not include closing costs, fees, or a down payment. So, as you can see, this leaves less then you probably thought. (more…)

What is APR? (Annual Percentage Rate)

An APR is the annual percentage rate that a homeowner is charged for obtaining the mortgage loan. The percentage amount represents that years actual costs for mortgage payments over the actual term of the loan.

When first applying for a mortgage loan the APR will help the borrower compare rates easily among other lenders they may be interested in. The law states that all loan companies and credit card companies must provide their potential client with the APR to make sure the borrower is well aware of the actual rates applicable to the loan agreement. (more…)

What’s the difference between a fixed and adjustable rate mortgage?

Many people who are looking to purchase a home are not to familiar with the loan process and are wondering “what is the difference between a fixed rate and an adjustable rate mortgage.”

First off I would like to say that it would be a huge mistake taking on an adjustable rate mortgage(ARM) or commonly called a subprime mortgage. ARM mortgages are offered to borrowers that do not qualify for a regular loan because they have a low credit score (typically under 600). Many people believe that subprime mortgages given between the years 2002-2006 may be the reason the United States is in this mortgage crisis today.

Below listed is the definition of both a fixed rate and adjustable rate mortgage. (more…)

How soon should I be notified if my mortgage loan is denied?

This is a good question, but one that is very important. Your lender is required to gather relevant information and inform you if your mortgage was rejected within 30 days. In this time, the lender must do several things.

  • First, they must check your credit history.
  • Second, they must check your income.
  • Third, they must appraise the value of the property you want to buy.
  • And finally, they need to assess the stability of your income and of your employer’s business. (more…)

How much mortgage can I afford based on my income?

Figuring out how much mortgage you can afford is a process that involves several steps. However, once you have gone through all of them and have thoroughly examined your financial situation, you can have a much better idea as to how big of a loan you can afford, and in turn, how big of a house to look for. 

Lenders are using strict debt to income ratios in these tight lending markets. So, it is imperative that you get a basic understanding on how this is done. Typically lenders are looking for debt to income ratios of 34-38% in order to qualifyfor a mortgage. Higher percentages are allowed with compensating factors on certain mortgage products. (more…)

Can I find out what my house is worth online?

Many people believe that you do need to get your home appraised to find out what it is worth. However, this is not necessarily true. You do not need to get a full on appraisal to figure out about what your house is worth. In fact, if you are simply considering buying your home and would like to know what it might bring, an appraisal may not be for you.

There are websites that allow you to figure out how much your home is worth, and they are actually fairly accurate. Sites like www.Zillow.com and and http://realestate.yahoo.com/Homevalues are pretty popular sites to get an estimate on your home’s value. So, if you are just exploring the possibility of selling your home, you can get a good estimate as to what it is worth online! (more…)

Can the lender include late payments into the loan modification?

Homeowners today are struggling paying their monthly mortgage payments due to financial hardships and are wondering “if they can get their late payments and fees included into the loan modification?”

Yes! In most modifications you lender will include your late mortgage payments along with the late fees that occurred as well.

Make sure that your lender is aware that this is your intention. Request when first applying that the deliquent payments be added to the back of the loan. (more…)

How long does foreclosure take in Ohio?

Unlike states such as California, Ohio chooses to go about foreclosure using the judicial process. With a judicial foreclosure this means that your home must be foreclosed on by court actions. The lender must file a lawsuit against the borrower and ask the court to foreclose on the defaulting mortgage and order a sale of the foreclosing property.

Below is a list of following procedures that must be followed in order for the foreclosure to take place.

  • Once the borrower has become delinquent on their mortgage payments the lender will file a foreclosure complaint with the county (more…)

What is a subprime mortgage?

A subprime mortgage is a type of mortgage we don’t see anymore and was offered by lenders to borrowers that have a very low credit score or possibly even no credit at all. Typically borrowers with credit scores under 600 would qualify for this type of loan.

These borrowers didn’t qualify for a conventional loan because of their low credit score, and were considered to have a much higher risk of defaulting on the loan. So because of this the loan would typically have a much higher interest rate than normal and it was usually adjustable. (more…)

What is a mortgage forbearance agreement?

One way to stop foreclosure in this time if crisis is to request a forbearance agreement from your lender. This is an agreement made between the mortgage lender and the borrower that has become delinquent on their monthly mortgage payments. A forbearance agreement is a temporary workout plan provided by the lender to help the homeowner bring their account current once again.

The forbearance plan is not a permanent solution for borrowers who have fallen behind on their payments. It was made for homeowners who need temporary assistance with their financial situation due to unpredicted events that have taken place in the homeowners life. (more…)

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 this technique.

First off, this 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.  (more…)

What is a mortgage bridge loan?

It is hard for many homeowners to get the timing perfect when it come to buying and selling a home. Many homeowners tend to find a new home they want to purchase before they have sold the home they currently reside. So because of this lenders have established what is called a “bridge loan.”

These loans are very short term loans also referred to as “swing loans.” Its term is usually only about six months to one year and typically has a very high interest rate as well. This loan was only made to allow borrowers to carry their mortgage to a new property until they are able to secure a permanent mortgage. (more…)

What is confirmation from a mortgage company?

Confirmation from a mortgage company will come after you have been approved for the mortgage loan. Usually, this confirmation will come by letter, and it will contain two things. First of all, it will contain a basic cover letter. This letter will thank you for your business, tell you that you are joining a huge family of customers, and that they value you as a customer, etc.

Next, you will receive a written mortgage confirmation. This will include some vital information about the mortgage, will give you the basic details, and will have a place for you to sign. (more…)