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.

Do Upside Down Mortgage Holders Have Options?

Have you been having problems meeting your payments and even found that no one wants to purchase your home for more than you owe or even merely what you owe on it? If this sounds familiar and your home’s mortgage is a lot more than what your property is valued at, you are what is called an “upside down mortgage holder.”

A lot of people are probably stunned when they fully grasp they are upside down, and till only recently, they probably never heard about something called a short sale, which is really just selling your house for anything you could get and then making an arrangement with the mortgage lender regarding the remaining balance due.

Most people usually are not happy with the short sale approach, but do upside down mortgage holders have a possibility other than short sales. The answer at this moment is yes. There is a different program offered now known as the Principal Balance Reduction Program.

A Principal Balance Reduction Program is essentially a program wherein home notes are sold to a hedge fund at a large discount, the hedge fund decreases the amount of principal owed to 95% of the market value and modifies a few terms and the interest rate for the homeowner.

Is this brand new option for you should you be an upside down mortgage holder who’s been contemplating a short sale? Potentially. The pros to you can be considerable savings, the ability to maintain your home by essentially short selling the house to your self, and keeping your tax incentives and not destroying your credit rating.

Should you discover yourself to be experiencing the housing problems head-on, you should understan about the principal balance reduction program. Can upside down mortgage holders have a choice rather than short sales? You bet. So, look into it in the event you have to.

Related Articles: hamp loan modification program | way to stop foreclosures

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

Use These Four Tips To Improve Credit

Have you ever gotten a mortgage or car loan? Then you probably know the importance of a good credit rating. Having a mortgage rate of 7% versus 5% is a huge amount of money over the life of a 15 or 30 year loan. You will save yourself thousands of dollars every year if you have good credit. Here are 4 tips to improving your credit rating.

1. Pay off credit cards

Make a list of all of your credit cards and their balances. You need to do your best in getting these balances paid off. Tear up the cards if you have to. Don’t make the minimum payments as you will probably never get them paid off that way. Be disciplined in how you are going to get them paid off. If you have more than one credit card it would be best if to pay of the largest amount before paying off the smaller amount on other credit cards.

Credit rating agencies like to see borrowers with a low balance compared to the total credit limit. If you have a $5,000 limit your score will improve with a zero or low balance versus having a balance for $4,800.

2. Always Pay Debt Obligations On Time

Being a few days late is understandable and can happen to anyone. What you want to avoid is being 30 days late. If you have a decent credit score one 30 day late can drop your score by over 100 points. It seems a bit unfair but unfortunately that is how it works. If you cannot make a payment call your credit card company and tell them that you will not be able to make a payment. Ask them if they can refrain from reporting the 30 day late.

3. Remove Late Payments

Obtain a copy of your credit report and look who is reporting late payments. Call those credit cards companies or lenders and ask them to remove any or all late payments. If you are a good customer they just might do it. I was on vacation and missed a credit card payment one time. I called the company and told them the story and reason behind the late payment. They agreed to remove it.

4. Keep all of your credit cards

Applying for a new credit card account can hurt your scores. Oddly enough, moving balances from several cards to one card can hurt your score as well. It is better to have lower balances on several cards than one big balance on one card. Again, lenders look at the percentage of debt you are using on a particular loan. They don’t like it if you are using a high percentage.

Following this 4 steps will help improve your credit scores. These work best if your score is low to mediocre. If you have a score above 700 you may not see a huge increase in credit score. The bottom line is simply to spend what you can afford, do not be late on payments, pay off your balances quickly, fix any errors on your credit report and don’t stiff anyone. Do this for a long enough period of time and you will have good credit.

Slade Tanner – Mortgages in Sarasota

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

Credit Cards Dos And Don’ts

Just ask yourself: is your credit card working for you or are you working for your credit card? Most people’s response to this question will depend on how they treat their “plastic pal” as credit cards are often known. As many people with burned fingers will tell you, they didn’t realize that things had become so bad until very late, because most credit card companies try so hard to make themselves sound like a charity.

But this is not an anti credit card campaign. They have their benefits – in the USA, for example, if you want to hire a vehicle, you have got to have a (major) credit card. But, think about this scenario:

You get an offer in the mail that sounds good, maybe it’s a new television or fridge. But it costs $2,000. You have a credit card with a $5,000 limit, so you go out and purchase the product right away. Often, this is how your repayment schedule will work out. Most credit cards charge a minimum percentage of the total balance (usually 2 percent) per month. Assuming the interest rate is 18 percent and you choose to repay the minimum amount of $40, $30 of that will go towards interest and only $10 will come off the $2,000!

Does it sound worrying? Well, it doesn’t have to be. The moral of the story is to use the credit card very, very carefully.

Credit Cards Dos and Don’ts

There is a great deal of truth in the advice that credit cards are not a substitute for not having money. Every time you use a credit card this should be the theme song playing in your mind. Moreover, you would do good to remember the following too:

Dos.

1] Always plan for the purchases that you need and those that you just want. You need the essentials, and you want everything else. The ability to make a distinction might help you plan wisely.

2] If you are caught up in financial difficulties, it’s always a good idea to talk to the credit card supplier who might adjust your payments. If you simply default, that only helps to build up a bad credit history and you might find yourself being denied credit in the future.

3] Unless it is an emergency, remaining within your credit limits will help you a lot. If you have to spend over the limit, ensure you are within manageable levels, say within 30 percent.

4] If your letterbox is chock-full of information on credit cards with more favorable offers than you are currently enjoying, you could always approach your issuer for a better deal. They want to keep you as a customer, so they will listen.

Don’ts

1] Do not use your credit card to purchase household items. It is very expensive in the long run.

2] Do not only pay the minimum amount necessary. You will end up paying exorbitant amounts of interest. The quicker you are able to clear the debt the better.

3] Never use the credit card to buy items you can’t afford without the credit card.

If you are considering changing or getting a Credit Card, have a look at the free advice on our website about using Credit Cards wisely.

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.

Stop Drowning in Debt

The Congress of the United States established the bankruptcy system specifically so that a person who is financially in debt can get a fresh financial start. Good people, with good intentions often suffer life circumstances that cause them to be in debt with payments much greater than they can reasonably pay. The filing of bankruptcy directly stops all of your creditors from attempting to collect debts from you outside the bankruptcy process.

Experienced Bankruptcy Attorney Dan Scott reports that bankruptcy filings continue to rise. As the economy continues in its downward spiral, good people are often left with very few options but bankruptcy. In fact over 1,446,000 bankruptcy cases were filed in 2009. It seems that there are many myths about Bankruptcy. I want to dispel 3 Myths about Bankruptcy in this article.

There are 3 Myths about Bankruptcy That Must be Dispelled

Myth No. 1: Filing Bankruptcy Can be Pricey. For less than you will spend on your credit card payments and other monthly payments, you can probably pay a bankruptcy lawyer and court costs. What’s it worth to you to no longer owe your debt? I’d say significantly more that the cost you’ll incur. Creditors tell you, “Just pay the money to me.” Don’t be deceived when they say that.

Myth 2: You may lose your property in a bankruptcy: If you weren’t paying all the other debts could you pay your house note and your car payment? For most folks the answer is YES. Because the answer is yes (if it is) under most circumstances you will not lose your property when you file a bankruptcy case. The Exemption Statutes passed by Congress allow you to keep a specific amount of property if you file your case. Because of the values of your property, in most instances you won’t lose your property in a bankruptcy case.

Myth 3: Not all your debt can be discharged. I hate it when this statement is made because it has “some” truth in it, but not much. Almost every unsecured loan, medical bill, credit card and pay day lender will be wiped out when you file a bankruptcy case. If you file a Chapter 13 case (For the difference between a Chapter 7 and a Chapter 13 check out the video at http://www.danwillhelp.com) you’ll pay payments over time that often clears all of your debt except your home mortgage. Certain specific debts will survive the bankruptcy, such as certain taxes, back child support, student loans, DUI fines or penalties, and claims arising from fraud. However in most circumstances all of your debt will be discharged.

So if you are facing financial trouble and you want to get out of debt though you have tried everything doable to get back on your feet, maybe it is time to consider filing a bankruptcy. You can find more information in the video series published by Bankruptcy Attorney Dan Scott. Go check them out for more information.

If you are struggling with your finances it’s time to get straight talk from an experienced bankruptcy attorney. Check out the video series which is absolutely free. Take back the power away from your creditors today!

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

True Story About Debt Consolidation Home Equity Loan

What kind of loan is a debt consolidation home equity loan? This is a loan that is a cross between two different loan programs that have been around for quite some time. The home equity loan borrows against the equity you have in your home. The debt consolidation loan rolls all your unsecured debt into one lower payment. When you are in need of a lower monthly payment and do not mind a longer payment term, this loan could be the one you need to get out of the spot you are in.

The first half of this hybrid combo loan is the consolidation loan. This is a type of loan that works to reduce your monthly payment for a certain amount of debt to a lower figure than you are currently paying. For example if you had a total of 9 loans including credit cards and a car loan. The total debt was 15000 and the monthly payment was 500. 00. You could consolidate this amount for 5 years and the payment would be 275. 00. This happens because the term is longer.

The equity loan on the other hand is a loan secured by the equity your home has built up. With enough equity in your home, you can be approved for one of these loans quite easily. This is because the collateral will be your home. Equity works like this, if the home has a value of 200,000. 00 and you owe 100,000. 00, the equity is 100,000. 00.

The catch is that you can borrow only 70% of the house value. That means that in the eyes of the bank, your house is only worth a value of 140,000. 00. In this instance, you will only qualify for a loan of 40,000. 00. The length of the loan will be somewhere between 5 and 20 years. The same 15,000. 00 loan would have a length of payment of 10 years and a payment of 142. 00 each month. The equity line of credit will give you a longer repayment period, thus, lower payments.

You will usually pay less per month on an consolidation loan but most of the time you will be paying for a longer period of time. If you are in great need to reduce your monthly outlay, this can be a great deal for you and save your credit rating too.

There is a common problem with this type of loan, as you may experience a little trouble in the qualification process. Some people that have been having problems for a few months will experience a ding in their credit history and that will cause a higher interest rate on the loan or in the worst case, cause them not to qualify for the loan. You have got to see the financial trouble coming and decide on the loan before you actually need it in order to get the best interest rate and other terms. S

This type of loan can be a great thing for your situation and could save much stress and hardship. Just know that by using the equity in your home for a consolidation loan can continue to hold up a large chunk of your equity in your home for a long while. If the values fall you may end up owing more than what your home would appraise for.

Talk to a financial loan professional before you make any decision like this and just use good common sense.

What exactly is a debt consolidation home equity loan aka bad credit home equity loan? This is kind of a hybrid between two types of loans, both the common old debt consolidation loan and the all famous Home equity loan.

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