Basic Mistakes To Prevent When Purchasing Your First Home

It’s exciting to take that first step to purchasing a home and no longer paying rent. This experience is new and scary as often most people don’t know what they are getting themselves into, let alone know what they are doing when planning for their dream home.

When emotions get involved in buying high-priced purchases, decisions are rushed and buying mistakes can happen. When buying a home for the first time, there are some common mistakes that are made by first time buyers.

Slip up number one is not really having a clear idea of what you want. To avoid this you should have an explicit list of features you desire so you can be ruthlessly precise.

Another mistake first time home buyers make is they don’t take time to figure out their financial situation. It’s always a great idea to figure out how much you can afford for payments each month so you can buy within your means. Making this mistake can lead to other mistakes, eventually digging you in a hole that could lead you into foreclosure.

Even though financially you may afford a home, don’t purchase it at face value. This type of thinking may make you undervalue the true costs of purchasing a home. For your monthly budget, you need to make room for property taxes, utility costs, mortgage payments, insurance, and repairs among other expenses.

Before you shop for a home, make sure you are pre-approved for a mortgage. If you don’t get pre-approved beforehand, you’ll just waste the agent and your time. You also don’t want to do things that could cause your loan application to fall through.

Buying a home for the first time without the help of an agent is also another mistake. Letting the agent do the negotiations for you will help in hiding your excitement, as letting your feelings show will lead to a high price.

Finally, you should always get a professional in to give your house the once over before your sign up. This will ensure that you will not face unexpected costs later on.

This writer takes pleasure in contributing information regarding New York real estate subjects, such as East Village apartments as well as Lincoln Center apartments.

Making The Most Of The Current Mortgage Rate

These days anyone with a computer and an internet connection can find it fairly simple and convenient to keep up to date with the mortgage rates current trend, as well as many other pieces of useful financial information.

If you make a point of reviewing the current mortgage rate regularly, then over a period of time it becomes possible to identify the current trend and which direction rates are moving in. This can obviously be very useful for anyone looking to purchase a new home.

The majority of mortgage providers will allow clients to lock in the mortgage rates current on the date of application. You have to strike while the iron is hot. Timing the application process precisely can literally save you thousands of dollars.

Should rates go up after signing, the rate signed for holds. The bad news is that if rates drop, you could stand to lose a lot of money as well, so make sure you are certain before you contact a broker.

Keeping track of this data when there is so much money to be saved or lost can seem like a bothersome task. If you look on the bright side, you’ll be thankful that so much research can be done on the web. You don’t need to pay a financial adviser to do something you can do from your easy chair.

The advantages of researching this information online are many. For one thing there is no limit to the amount of times you can check this data, or any restriction on when you can view it, which is a vast improvement on the old days when a lengthy trek around town to visit numerous banks would have been required.

If you already own a home, you can still track mortgage rates current online to find a great rate for refinancing or for a second mortgage. You could be saving a bundle while using the money loaned to improve your home, consolidate debt, or even take a vacation.

A little regular effort to keep abreast of current mortgage rates can definitely help provide opportunities to save money in the long run.

Check out these personal finance based posts about current fixed mortgage rates.

It’s Easy To Determine If You Qualify For A Loan Modification

Just last year we’d spend way too much time with our clients trying to determine whether or not they qualified for a mortgage modification. In 2010 it takes me just a few minutes and is about 100% accurate. That’s because the banks, in their rush to streamline, have become standardized and predictable.

Standardized – The Making Homes Affordable Program (MHA) Guidelines have become the standards. Other programs are modeled after the MHA. None of the other programs are as rich and all are harder to get. But the guidelines have become universal.

I say predictable because the sheer numbers of applications has forced the banks to routinize everything – including erroneous rejections – to a point where it is pretty obvious to us veteran loan mod freaks.

Homeowners will get a mod if they, 1) have a typical hardship, 2) the loan qualifies (non-jumbo, done before Jan. 1, 2009), have correct ratios, 3) live in the home, and are in default. That’s not to say that landlords are SOL…they just have less likelihood of approval and must have lower expectations.

Don’t mistake qualifying with getting approved! Thousands of qualified applicants get rejected every day! Being qualified is just the beginning of the journey. You have to know how to navigate this bureaucratic, convoluted, administriviated maze (don’t bother to right-click – I made up that word!). You can’t do that with advice crafted for the masses – advice you get from the banks themselves or from the government. You need to get advice from a source that has actually succeeded in getting throught he maze – time and again.

You should have the advantage of an insider, a street-smart advisor who has been at the game table for a long time. Someone who is unabashadly on your side – not a government entity and certainly not a bank employee or site. If you follow the advice of the government or bank sponsored entities you can only expect to get info tailored for the masses. That’s like going into a street-fight with training in only boxing. You are totally unprepared when the opponant kicks you in the ear! You’ll have to pay for such advice. But, you get what you pay for.

Rockwood is an author and outspoken homeowner advocate. Want more insider tips on Mortgage Modification? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification

Short Sale 101, Basics Of A Short Sale

If the value of your home has declined below the amount you owe on it you are said to be “upside down” or “underwater”! Both terms conjure up negative thoughts, and, rightly so. With all the due diligence you put into the purchase, and all the business acumen, actuarial smarts, underwriting/appraising and brokerage experience put into the lender’s decision to accept the home as collateral it’s a strange thing indeed that the deal went south. But, it did go south. In fact nearly 20 million homeowners in the US are facing this scenario right now. It’s psychologically bad for all of them. It’s financially bad for those who must sell because of a job loss, reduction in pay, divorce, death or other reason. For them, it’s a financial disaster.

A short sale can be a great solution for such people. The lender has to approve such a sale because they have accepted the home as collateral for the debt. How the sale works, what happens to the “short” amount, what you tax liabilities are and how to be protected from future deficiency lawsuits are the right questions to ask. Let me start with question one, how they work.

This is How a Short Sale Works

Short sales work the same as traditional sales, with one additional step. When a solid buyer and a good offer are found, it must be submitted to the lender along with an explanation of your situation and a settlement summary (HUD-1) document showing the final payout to all parties if this deal is approved.

The application also includes a HUD-1Worksheet of the expenses involved in the execution of this purchase contract, and showing the net proceeds that the lender will receive. One of the items on the HUD-1 is the payoff amount of any “junior” lien holders. Typically, these lien holders settle for a small fraction of the amount owed as their claim on the collateral is subordinate to the 1st, or senior mortgage. That, by the way, is why they always charge higher rates – they are more exposed to loss.

Your lender then reviews the application and gets their assessment of the value of the home and the appropriateness of the offer. They do this by hiring a local Realtor to provide a Broker Price Opinion (BPO) or by using the Automated Valuation Model (AVM). The AVM is a computerized estimate of net proceeds if the home goes to foreclosure and the lender must sell it themselves. Usually this evaluation takes at least 30 days.

There are common misconceptions – myths – about short sales. Here are the most common ones I hear.

1. Banks would rather foreclose than approve a short sale

This is a common error. The reality is that banks do not want to foreclose on your property because the process is lengthy and costly. After all, the lender has to sell the property on the market eventually. Banks lose less through a short sale than a foreclosure.

Myth 2 – You have to be in default to get approved for a short sale

This is not true. The factors considered are whether or not the offer is reasonable and whether or not the buyer seems qualified.

3. Short Sales take too long to succeed after the foreclosure process has begun

This is a dangerous misconception. Many homeowners fail to pursue short sales believing that it’s too late. Actually, short sales are effective workout solutions right up to trustee sale (sheriff’s sale).

Lenders welcome the short sale application as an alternative to foreclosure. It’s just better for all parties, including the community (vacant, bank-owned homes are a real problem).

Myth #4 – Listing My Home as a Short Sale is an Embarrassment

It is understandable to have reservations about letting the world know that you owe more on your home than it is worth. However, according to recent estimates, one out of five homeowners in the U.S. is in the same situation. Estimates are that 40-60% of U.S. home sales in 2009 and 2010 will be short sales or foreclosures, you are not alone.

Myth #5 – Buyers are Not Interested in Short Sales

Smart agents and their buyer-clients evaluate deals based on the facts. The fact is that short sales are a significant part of the housing inventory and often the best deals are short sales. So, this is a misconception.

Short sales will continue to be an important part of the housing market stabilization. They are better than foreclosure, for all parties involved.

Want to find out more about actually getting short sales done? Visit Rockwood’s site at Home Loan Modification

How To Save Your Home From Foreclosure

Like 2.82 million of our fellow American homeowners, my family and I were threatened with foreclosure last year. After losing my job being forced to take a much lower paying one, we couldn’t afford to pay our bills, and our debts kept spiraling as we faced ever more charges and fees. My wife had to accept a part-time job as well, but it was still not enough to keep up.

Down and out on myself I had almost given up and was about to file for bankruptcy. I would have been completely lost if it wasn’t for a great friend of mine who suggested I get the inside information on my situation. I am happy to say that my house and other outstanding assets are now safe and I have new lease on life.

We all here the bad news everyday. The statistics are not much better with nearly a 1/4 increase4 in the amount of foreclosures since the beginning of 2009 and forecasts are not looking much better this year. People all around us are loosing their jobs, there hopes, and their good fortune.

Unfortunately for you and me, the banks can afford to hire as many real estate lawyers as they like, and they can basically do whatever they want because homeowners can’t, or more often don’t know how to protect themselves.

Even though the market is clearing up a bit and the government bail outs have helped stabilize the housing sector there is always a chance of things going south. Finally the agency’s and collectors have stopped calling me and I can see the light at the end of the tunnel. And I have the foreclosure secrets guide to thank.

Get all the information you can and know what is available. There are many available resources and having them all on your side will help when you are up against a giant like a bank. Do yourself a favor and get informed

Learn how to save your home from foreclosure. Stop by Mike Linkin’s site where you can find out all about home foreclosure help and what it can do for you.

Mortgage Experts Say HAMP Stopping Foreclosures Would Be A Miracle

There seems to be more and more discouraging news stemming from the overall failure of HAMP, the federal foreclosure prevention program, not just from mortgage and real estate professionals but from key Washington officials.

With letters being traded between Neil Barofsky, special inspector general for the Troubled Assets Relief Program (TARP), and one key senator, he has recently said in a report that the U.S. Treasury now expects only 1.5 million to 2 million homeowners to get mortgage relief.

Many feel that this would be nothing short of a miracle to help these millions of consumers needing assistance. But what of the other 2 million homeowners who have applied for the foreclosure prevention program?

The actual statistics may be surprising but only 200,000 homeowners have been able to go from their trial modification to a permanent loan status.

However, the grim outcome may be far worse due to the fact that many of these homeowners are at serious risk of defaulting again on their St Louis home loans even with the help of this federal program.

Again the critics are coming out of the wood works suggesting that these homeowners are irresponsible. But the truth of the matter is, many still owe more money than what their home is worth not mentioning that others have second mortgages.

The detestable statistics that will be briefly mentioned may be those thousands of homeowners who were indeed irresponsible to the point of buying homes they knew they couldn’t afford. And what is worse is the multitude of consumers who blatantly lied on their applications when it came to the now infamous stated income loans or what others call “liar loans.” These are the very one who helped create this mortgage fiasco alongside the insurance and banking behemoths.

Barofsky then goes on to express his ongoing skepticism that the continuous offering of modifications was less than a meaningful goal. What did the Treasury have to say in regards to what Barofsky said?

Herbert M. Allison, assistant Treasury secretary for financial stability, released in a report that the HAMP program “should be measured by how many eligible homeowners are able to avoid the pain and stigma of foreclosure by reducing their mortgage payments to affordable levels while either remaining in their homes or transitioning with dignity to more suitable housing. The number of permanent modifications is one element, but not the only element of gauging the success.”

Whether this federal program meets its ultimate success or failure is second only to the fact that these key officials want us to view their ideologies from their viewpoint and no other.

And so it goes, here’s another example of bureaucratic illogicalness. Allison is making the point that it is not the failing of HAMP that is critical but that Barofsky and critics are not measuring its lack of success correctly.

But the Treasury department along with Allison cannot fully believe this concept since he goes on to say that permanent modifications are really only one way to help struggling homeowners.

We cannot ignore the fact that these servicers are also offering other foreclosure prevention initiatives such as short sales as realistic alternatives.

However, most consumers have heard from its beginnings that this federal loan modification program (HAMP) was to be the very best way to help this country on the road to recovery by stopping the onslaught of foreclosures.

It should also be noted that any permanent modifications that do not include meaningful principal reduction will in all likelihood fail.

If you are wanting the best lending options on a St Louis home mortgage or a St Louis home loan, visit our websites.

How The New Mortgage Rules Affect House Prices

On Tuesday February 16th, 2010, Canada’s Finance Minister, Jim Flaherty, announced that the Government will be changing Canada’s mortgage regulations in effort to prevent potential mortgage borrowers from acquiring mortgages that they cannot afford. Due to the increasing concerns about consumers being attracted to low mortgage interest rates, especially borrowers who are securing variable-rate mortgages starting at very low levels, there are worries that many mortgage holders may not be able to afford the monthly mortgage payments which could result in a housing bubble. Flaherty announced that the Government will be implementing tougher restrictions regarding how banks go about approving mortgages. For people looking to purchase a new home, it is important to understand how the government mandated mortgage rules will affect home prices.

The goal of the new mortgage rules is to make sure borrowers are not taking on more debt that they can manage. Many experts believe that in the next couple of years home prices are likely to decrease thereby increasing the need for stricter mortgage regulations. Many economists note that the recent low home prices and low mortgage rates are eventually going to increase, but these new rules basically ensure the likelihood that the lower house prices will continue into 2011. In the coming weeks, it is expected that many people will hurry to acquire a mortgage before the rules kick in as the date the regulations come into effect is April 19th, 2010. After that, the housing boom will likely slow down as the market adjusts.

If you are in the market for a new home, this may be a good time to acquire a mortgage. It is important to remember that interest rates will eventually increase so you should create a long term financially stable mortgage repayment plan, especially if you have an adjustable interest rate. For instance, if you get an adjustable mortgage rate at 2% and in two years it rises to about 5.5%, this will cause a drastic increase in your monthly mortgage repayments. If possible, many real estate experts recommend a fixed rate mortgage with a larger down payment so that you will not be negatively impacted when rates increase.

The recent economic crisis has resulted in Government intervention in order to make sure the housing market does not crash. As the housing market stabilizes, home prices will eventually begin to rise. As well, as the economy rebounds, the current low prices being offered on many homes throughout Canada will not last. If you plan to purchase a home after April 19th 2010, it may be more difficulty to secure a mortgage as you will have to meet criteria that includes: a minimum down payment of 20 per cent will be mandatory for government-backed insurance property, the maximum you will be able to withdraw when refinancing your mortgage will be 90 per cent of the property’s value, and you will have to meet specific qualifying criteria for a five-year fixed rate mortgage.

If you have a secure job, good credit rating, and can afford the monthly mortgage repayments even when interest rates rise, this may be a good time to purchase a new home before the new mortgage rules become compulsory.

Analysts are expecting mortgage rates to rise and GIC rates to drop within the upcoming year. Read more about it on our blog.

Finding The Best Home Loans For People With Bad Credit

Need to pay for a property but you have credit that’s less than perfect? You are not alone. Lots of people are going through the very same thing. The good news is that there are mortgages designed for individuals with poor credit. These loans offer you a choice for funding the house you’ve always dreamed of owning.

Even though your credit history is not as great as it could be, you will find loan companies that will offer these loans to you so you can get the house of your dreams. Needless to say when searching for these plans, there are many recommendations you will need to keep in mind.

Suggestion One: – Simply Choose Credible Loan companies – The first ideas to remember when looking for mortgages for people who have low credit score is actually to ensure you only choose legitimate loan companies.

While you want that loan to purchase a property in spite of your credit rating, you don’t want to make a hasty decision and end up with a bad lender. Prior to deciding to pick a loan provider, check into their track record and also find out as much as you can about them. Recognize their reputation before you trust your future to a loan provider.

Tip 2: – Check Carefully on Conditions and terms – The next crucial thing to do when you need a property mortgage with poor credit would be to look carefully at terms and conditions prior to signing your name.

Even though home loans for people with bad credit can be obtained, a few lenders try to take advantage of people and could put things within the terms and conditions that you may not recognize. You need to know about any kind of additional costs or even hidden fees before you decide to sign your reputation to get the credit.

Suggestion 3: – Review Your Options – Even though it can be a bit more difficult to find home loans for individuals with poor credit, there are actually still multiple choices available to suit your needs. This means that it can be in your best interest to compare the options.

Take a look at a number of various loan companies that provide this kind of program. Compare their terms, the length of the borrowed funds, as well as the interest rates. Once you evaluate, you’ll be sure to receive the best feasible offer from a good provider.

Suggestion 4: – Search Online for Details – When you need info on home loans for individuals with low credit score or else you are even trying to find information on different loan companies, the world wide web is probably the best resources out there.

Numerous lending institutions operate on the internet, which means you can actually learn more about exactly what they have to offer online. This can be a useful reference, therefore use it to learn more.

You are able to finance a home even with bad credit. Mortgages intended for individuals with bad credit could make your dream property a reality in a lifetime. Simply keep these tips in your mind so you\’re certain to obtain a good loan.

Anne Durrell originally comes from Stockton, California, USA. Other guides you may be interested in reading: low interest personal loans tips, and personal bank loans guide!

Will Loan Modification Plans Work For You?

The economy of the United States is currently in a state of near crisis. One result of this economic crunch is the appearance of loan modifications. Due primarily to the current recession, there are currently almost six million homeowners facing foreclosure.

In fact, consumers have also reduced their spending largely. Experts have determined that the root cause of recession can lead to more such crunches in the future.

The Rescue Plan:

President Obama has designed a well-analyzed and well-organized economic stimulus plan which include’s loan modification. This plan will produce a great stimulus for the economy if it is applied in an appropriate way to the home market system.

This plan understands that homeowners are not able to refinance their loans and take advantage of the now historically low interest rates, because the loan-to-value (LTV) ratios are too high.

Before most lenders will consider a loan modification plan, they generally expect the homeowner to owe no more than 80% of the current value of their property, in other words, the majority of lenders require an LTV of 80% or lower.

According to Obama’s Home Mortgage Plan, a person should have access a 30 year fixed rate mortgage with an interest rate of 4.5%. Plus, this plan states that refinancing should be made available to current homeowners at a 4.5% interest rate.

A loan modification, unlike a refinance is not a new loan. Rather, it is a change in the terms of an existing loan. The government is even providing incentives for lenders to participate in the loan modification process. The incentives are as follows:

Some of the benefits of The Obama Loan Modification Plan to the Economy are stated below:

1) It will help people save more money be reducing their interest rate after they qualify for a loan modification.

2) Even offers cash incentives with the objective to entice the borrowers to choose the program.

3. The program will pay the borrower $1000 for the original loan modification, and an additional $1000 each year for three years. However, in order to qualify for this money, you have to pay your dues on time without any defaults.

In order to qualify for this new loan modification plan, you will of course need to meet certain criteria. One critical condition that must be met is that the loan should not date back beyond January 1st 2009, and you must be the prime resident.

First Time Buyers Fail To Shop Around

Almost two thirds of first time buyers accept the first mortgage they are offered and fail to shop around, often missing out on better deals.

Many first time buyers feel pressured by their estate agents into quickly organizing a mortgage for fear of losing out on a property or are attracted to a low interest rate without looking at the mortgage deal as a whole.

However, with such a vast range of mortgage lenders to choose from, first time buyers are well advised to step back and do a little research before they commit.

There are a number of places to find good mortgage deals:

Speak to your bank

Your bank or building society may provide special offers to their account holders, but don’t feel that you have to accept their offer through customer loyalty as there are many other places to look.

Consult with a financial adviser

Financial advisers can offer you a range of mortgage deals to choose from that are appropriate to your circumstances. Some financial advisers offer free advice, but can only provide a limited range of mortgages, through which they earn a commission.

Independent financial advisers will offer a wider range of deals, but you may need to pay them to provide this advice. However, this is often a worthwhile investment, as commission earnings do not influence the adviser, so the mortgage is more likely to meet your requirements.

Get on the net

A search on Google will generate a list of hundreds of US mortgage providers to choose from. Many will have online mortgage calculators, to give you an idea of your repayments.

Alternatively you can use financial comparison sites, such as MoneySupermarket.com to do the work for you. Simply enter your requirements and let the comparison site search hundreds of providers to provide you with the best deals.

Don’t always depend on the rate

Don’t always assume that a low interest rate makes a cheap mortgage. Providers often use low rate deals to attract new customers, however you may end up paying more money in the long-term.

Check the small print of the mortgage and find out if you will be penalized financially for opting out of the deal early or if there are any hidden costs.

Don Suter is Managing Editor of the UK Property Portal (http://www.ukpropertyportal.co.uk), an online directory. Mortgage Rates Credit Cards Refinance Home

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