Mortgage second

Best Alternatives for Home Remodeling and Enhancement

admin — Mon, 08 Feb 2010 00:17:48 +0000

Sometimes, when you are spending your spare time at home, you come to realize some things missing your own house: you may need additional room, or you may want to add more embellishments. And upon realizing those absences, you come to think of the possible expenses you might encounter. A well-liked method of increasing the value of your home’s equity involves the need for loans intended for home enhancement.

For best alternatives for your home remodeling, here are the two major types of mortgage refinance or loan that you can avail:

Home Equity Loan (A Second Mortgage)

There are loads of home remodeling loans to consider as your prime options, and one of which is the home equity loan. Basically, a home equity loan is a loan obtainable through the use of your assets, given that this is going to be your second mortgage. It is a vast means of accessing to overhaul, recondition, and modify your home if you so desire. At a fixed rate, home equity loan needs borrowing money in lump sum. But for you to qualify and avail in this type of loan, there are several factors to bear in mind. First are your credit scores: the higher your credit scores, the lower the interest rate on your home equity loan. The other one is the amount of equity your home has. Of course, you can bet for a higher loan if your home has some worth.

Home Equity Lines of Credit (HELOC)

Home equity line of credit (HELOC) is one of the vital means of using your invested money in your mortgage. Its versatility is the prime reason why you should take a genuine grasp on home equity line of credit. If you are granted a home equity loan of about $10,000 payable for 15 years at 7% APR, automatically, it will be deposited to your account in full amount of the loan, but you can never withdraw it unless it’s the date that has been specified by your loan agreement. Home equity line of credit is more similar to a credit card, because by the time your application has been approved, the bank establishes a line of credit, which functions similarly as the credit limit on your credit cards. Perhaps you can receive a plastic card or a special check during the approval of your line of credit, but it’s definitely not going to be in full quantity but rather a specific amount at a time. This means that there is no need for you to rush in taking the full amount right away. For instance, you are recently having a home modification on your kitchen, which would cost you up to $4,000 worth of materials, including the utensils. You can then use your equity line of credit to pay for that particular amount. Your $6,000 is obviously left in your line of credit. And in few weeks’ time, you can still use the remaining line of credit for your future expenses in remodeling your home. Home equity line of credit offers you tax deductions for your mortgage and credit flexibility.

By: John Smith Jr.

Need A Debt Consolidation Loan? – Try Second Mortgages

admin — Sun, 07 Feb 2010 05:56:50 +0000

For many of us, money can get tight every now and then. We have felt the pinch, and many are feeling it now. If you are in that situation where you now have a lot of debt, and are wondering what you can do about it, there is a possible solution for you with a second mortgage. If you already own a home, have some equity built up in it, have a decent credit rating, then you probably already qualify. Here are some things you need to know about getting a second mortgage for debt consolidation.

First Things First

Before you think about getting a second mortgage, there is the possibility of a more economical way to consolidate some debt. That step would be to refinance your first mortgage. It only makes sense, though, if you can refinance at a lower rate of interest than what you currently have on your existing mortgage and present debts, such as your credit cards, that this would be a good way to go. This should be looked at as your first choice because a second mortgage will have higher rates of interest than a first mortgage.

How It Can Help

If refinancing is not available to you, then consider getting a second mortgage. This type of loan is usually against the equity of the home – often called a home equity line of credit. A second mortgage can save you a considerable amount of money by giving you lower interest rates than credit cards, and by making your payments smaller each month.

Look At Loan Costs

When you are ready to choose which loan is for you, you need to look at more than just the interest rates. One of these would be the length of time for the loan. While it is a good thing to have lower payments, you also need to make sure that the total amount to be paid puts you in a better situation. A longer time period may end up meaning that you are actually paying more over the long run. In addition, you need to consider all other fees (points and closing costs) before you commit yourself for the long haul.

Consider The Type of Loan

Then, you should think about the type of second mortgage you want. A fixed rate mortgage allows you to have a steady payment for the duration of the loan. On the other hand, a variable rate mortgage has flexible payments that are dependent on the economy. This means you could have a real savings some years, and higher payments in the bad times. Generally, if the economy looks like it will be good for a while, then this would be the best way to go. Be sure, though, that you refinance it before the rates get totally out of hand and you lose your home.

Whenever you deal with loans and second mortgages, be sure to compare it with other lenders. You can do this very easily online and get an online quote very quickly. While a second mortgage can be used for any purpose, you should apply the money you need to pay off all existing debt (debt consolidation is good, but debt removal is better) before you do any thing else with it.

By: Joseph Kenny

Home Refinance Stimulus Package – Obama’s Stimulus For Mortgage Refinancing and Loan Modification

admin — Sat, 06 Feb 2010 11:00:04 +0000

Obama’s government has come up with home refinance stimulus package and loan modification programs to help all the needy owners in avoiding foreclosure. This program is designed specifically for all the borrowers who are facing financial hardships as they are not in a condition to repay the loan. The home refinance stimulus package and loan modification would cover as much as 9 million mortgages and the government would spend $75 billion for helping the homeowners.

Obama’s Stimulus Package has 2 main components:

1. Refinance

2. Loan Modification

Let us discuss each one of these components in detail:

1. Home Refinance Stimulus Package

· In this program the two most powerful mortgage lending agencies of the government Fannie Mae and Freddie Mac would refinance the home loans of all the owners who owe much more amount to the bank than the actual value of the house. The only condition for this package is that the mortgage must be a guaranteed one by Fannie Mae and Freddie Mac, and then even if you are strong enough to pay the entire extra amount, you can gain advantage of the program.

· But there is one major condition joined with refinance stimulus package and that is; the offer is only valid for the properties which are used for residential purpose. Any property which is lying like a building and no one is living inside, will not qualify for Obama’s home refinance stimulus package.

2. Loan Modification Stimulus Package

· There have been special incentives that Obama’s government is going to provide to all the lenders for doing loan modification on the existing home loans of the borrowers. According to this program, the homeowners can get rid of foreclosure by getting it done. The main features of this program would be; interest rate would be reduced and it can go down to 2% only, tenure of the loan would be increased to reduce monthly payment amount and borrowers will get waiver of late fees.

· With loan modification, lender will also take care of the total monthly payments that a borrower is making and it would not increase than 31% of the total monthly gross income.

By: Luke Cambell

When Should I Refinance My Mortgage If I Am Upside Down on My Home Mortgage?

admin — Wed, 03 Feb 2010 23:43:06 +0000

Maybe the correct question is not, When should I refinance my mortgage? but Should I refinance my mortgage while upside down on my home mortgage? What are my real options and can I refinance with negative equity? To keep it simple, all we are trying to do is gain some financial advantage and possibly at the same time resolve some financial difficulty. It could be that all you really need is a little upside down mortgage relief for 5 to 10 years until the housing market reverts.

So How Do I Get Help With Mortgage Payments If My Mortgage Is Upside Down?

Assuming your mortgage is underwater you are probably better off to modify your home loan into a lower monthly mortgage payment without refinancing. There are no closing costs, you keep your same lender, if there is an interest adjustment or balloon coming up it is put off during the 5 to 10 years of mortgage reduction and you may be able to permanently reduce your interest rate or convert it to a fixed rate (if adjustable).

Don’t Hold Your Breath Waiting For Your Lender To Offer You This Option, He Won’t

In fact if you are current on your payments and you asked for a little upside down mortgage relief he probably said you do not qualify. This is not true but it is the most common response when you ask your lender for help. They may even state you have to be two or three months behind before they will “help you”. Not an option if you are trying to maintain good credit. Then when you are behind on payments, less than half the time will your lender offer you more than a 10% payment reduction and more often will modify your home loan into a higher payment because you are behind. What kind of help is that?

You have to know what to ask for, what you can negotiate, what you qualify for and what your lender is authorized to approve. Only then make a written submission with the proper documentation to support your request but only the information and documents you have to supply to be approved. You can disqualify yourself by supplying too much information that is not required or not supplying enough. This is where you may want to get some professional help, but I will offer you a little free help here that will get you started.

Find Out What You Qualify For Under The TARP Mortgage Reduction Program

Oct 2008 while the banks were getting bail out money, US Secretary of the Treasury, Timothy Geithner announced that under the new guide lines 70% of US home owners qualified for help with mortgage payments.

We have compiled a database of the mortgage reductions we have successfully negotiated since Oct 2008 under the TARP Mortgage Reduction Program. Under these guide lines having a mortgage upside down while remaining current on payments actually increases your chances of qualifying. With the data we have complied we know what modifications lenders are approving, the criteria required to qualify, what lenders are authorized to approve and what is negotiable.

By: Dan North

Second Mortgages and Home Equity Loans

admin — Wed, 03 Feb 2010 11:05:37 +0000

Second mortgages and home equity loans are perfect for homeowners needing money to make home improvements, eliminate debt, and so forth. These loans allow homeowners to obtain loans based on their home’s equity. Home equity loans and second mortgages are better than refinancing because funds are received in a few days and homeowners are not required to paying huge fees.

What are Home Equity Loans and Second Mortgages?

Home equity loans and second mortgages provide homeowners with a lump sum of money. For the most part, homeowners obtain these loans when needing to make a big purchase or wanting to consolidate bills. Credit cards and consumer debts have ridiculously high interest rates. Although second mortgages have interest rates higher than the original mortgage, the rates are much lower than those offered on credit cards. Thus, homeowner may obtain a home equity loan to pay off credit cards. Home equity loans and second mortgages carry a fixed rate and have an average term of three, five, or seven years.

How Do These Loans Work?

In order to obtain a home equity loan, a property must have enough equity. Equity is the difference between a home’s value and the amount owed to the mortgage company. For example, if a home is worth $120,000, and the amount owed to the mortgage lender is $80,000, the property’s equity is $40,000. Therefore, the homeowner is permitted to receive a home equity loan up to $40,000. There are instances when a home equity loan and second mortgage is granted for more than a home’s worth. These are 125% home equity loans. However, these loans carry a very high interest rate and the interest is not tax deductible

Homeowners receiving a home equity loan are required to make two mortgage payments. The first payment pays the balance of the original mortgage, whereas the second payment pays the balance of the home equity loan. Before applying for a second mortgage, homeowners should evaluate their finances and determine whether they can afford an additional monthly payment. Defaulting on a home equity loan or second mortgage could result in a lender foreclosing on a property.

By: Carrie Reeder

How Do Home Equity Loans Work as Second Mortgages?

admin — Fri, 29 Jan 2010 23:11:56 +0000

Writer Dan Ackman notes in an article at http://www.forbes.com that a recent report by Goldman Sachs shows “in 2004, Americans withdrew $640 billion in equity from their homes–by selling them, taking home equity loans or by refinancing. This was twice the total of 2001, showing that cash-outs have been rising even faster than home prices, which is very fast indeed.” No doubt about it, Americans are using their equity!

The home equity process is streamlined these days as more and more consumers utilize their computers in acquiring loans. Information is limitless on the internet with websites such as http://www.about.com and search engines allowing consumers to answer their questions with a few keystrokes. Gone are the days of going from bank to bank to find the best rate and product. Loan applications now start online. There’s no time better than the present to take a closer look at how equity loans work and how to make your equity work for you.

What is a Home Equity Loan?

Equity loans are 2nd mortgages that are secured by the value of your home. Today you can get a 2nd mortgage without having to refinance your current mortgage. The amount of equity available to you is based on the loan to value ratio, which is the value of the loan against the fair market value of your home. So a loan of $65,000 on a $100,000 home has a loan to value ratio of 65 percent. The standard ratio is 80%, but some lenders have loans with a loan to value of 100% or even 125%.

There are two types of these second mortgages. You can either get a home equity line of credit (HELOC) or a home equity loan. An HELC works much like a credit card. It’s a revolving line of credit that can be paid off and used again. Equity lines of credit however, have a variable interest rate. Home equity loans on the other hand, involve getting all of your cash out at once and have a fixed interest rate. These work more like a standard loan.

Are Second Mortgages Right for you?

Home equity loans are considered as secure as a primary mortgage and usually the home equity rate is lower rate than credit cards and auto loans. This lower rate can make an equity loan a good choice for home improvement financing, loan consolidation and tuition expenses. The lower rate can mean monthly savings if you consolidate your debt. The interest can also be a tax deduction. Depending on your situation, this savings may make a home equity loan a good choice for you.

Home equity terms vary depending on the product. They will also depend on your credit score. Good credit will give you more options than bad credit. Home equity loans also have varying costs. There may be closing costs, appraisals, credit reports and points you will need to factor in to the cost of the loan. You should also be aware that if you refinance your existing first mortgage, the lender that holds the second mortgage must sign a subordination agreement, or the loan must be paid off with your new mortgage. The best loan for you will depend on your situation. If you know how your equity loan works, you can make sure that it works for you.

By: Rebecca Oconnor

How to Obtain a Bad Credit Second Mortgage

admin — Fri, 29 Jan 2010 17:50:07 +0000

We all know banks are not loaning money as easily as they used to when a loan is applied for. The fact is they are now looking much closer at credit scores before they make a decision on who qualifies and who doesn’t qualify for a loan. It is possible to get loans with bad credit, but not easy. Here are some possible ways of getting a bad credit second mortgage loan.

If your credit is not excellent, and you would like to improve it, a second mortgage gives you the option to consolidate your credit card debts and other payments you might have into a single loan, with a single payment each month, and you won’t have to refinance your original mortgage. Be aware the amount a lender can give on a second mortgage will not usually exceed the amount of equity you might have in your home.

Contrary to home equity credit lines, the second mortgage is a loan you get only once, and it has a regulated payment amount you need to make monthly. You can use the same lender as the original mortgage to get the second, or opt to try a different one. How easy it is to get money and how much money can be loaned are dependent upon the amount of equity in the home the owner has and his her credit report.

Most bed credit mortgage lenders look at the most recent two to three years of one’s credit report to make a decision. Whether you have been making your payments on time, and your income to debt ratio is in line are two major factors that determine who will have a chance for a bad credit second mortgage.

Another serious factor that is considered is what you intend to do with the money if the loan is approved. If your intention is to pay off high interest debts and consolidate things to make payments easier to handle, rather than invest in other projects or plans, your chances for approval of a bad credit loan go up.

It’s imperative to have collected some information to give the loan officer prior to your consultation when applying for a bad credit second mortgage. A copy of your credit report and any discrepancies noted with how you are trying to alleviate these in writing is helpful. If there are no errors on the report, a statement of how you are making improvements to your credit score should be attached to the loan application.

The best thing to do is be totally upfront with your loan officer about any indebtedness and your current situation. It’s also necessary to include your total income in the figures in order to figure out your debt to income ratio. The bank does not want to loan money that will not be repaid, forcing them to foreclose. As a result, it’s necessary to explain why you require money, and how you intend on using it.

Bad credit second mortgages aren’t easy to come by, but they can be the best option you have to improve your credit score in these tough times. You can improve these scores legally and quickly by putting numerous high interest rates together into just one lower interest rate loan without refinancing your original mortgage.

By: Paul Van Rode

Homeowners Consider Second Mortgage Loan to Consolidate Credit Card Debt Prior to Filing BK Or CCC

admin — Wed, 27 Jan 2010 18:03:14 +0000

It is not uncommon these days to for a person or family to let credit card debt get out of control. We live in a credit driven society, and to survive the pitfalls of revolving credit and economic cycles you need to create an attainable budget and follow through with your fiscal plans. Don’t let the bills and debt begin to mount. Bankruptcy and consumer credit counseling are good solutions for certain situations, but you should take certain precautions to prevent being put in that predicament. Homeowners have more viable options than consumers who don’t own property, so if you are fortunate enough to own a home, take advantage of the financing available that can help you lower interest rates, and convert compounding interest into a simple interest home equity loan that can save you hundreds of dollars every month.

Many second mortgage companies have has partnered with a home equity lenders to create loan programs specifically designed for consolidating debt that lower your monthly payments, and help you refinance revolving credit cards. Sure talking with creditors can reduce or your interest rates and help you reduce your lower your credit card expenses, but you should never take it upon yourself to pay less than the minimum for monthly payments.

Paying creditors less than agreed will significantly harm your credit score, as creditors will report payments late if they do not cover the minimum payments. This is where consumer credit counseling can hurt you. In addition to causing late payments to be reported, entering a consumer credit counseling service cam permanently scare your credit, because the credit bureaus report that you are in consumer credit counseling programs. Many home equity lenders will consider Consumer Credit Counseling or CCC as a Bankruptcy. CCC may help people in many different situations, but you need to know ahead of time, of the repercussions that come with consumer credit counseling. CCC is not bankruptcy, but if you are given interest rates like you a bankruptcy, and it results in lower credit scores, you have to wonder if it is worth the efforts.

All we are saying is that you should consider all perspectives before you enter into consumer credit counseling. Under the Fair Credit Reporting Act, accurate information about your accounts can stay on your credit report for up to seven years. In addition, your creditors will continue to report information about accounts that are handled through a debt repayment plan. Quite often, credit companies will report that an account is in financial counseling, that payments may have been late or disregarded. Some creditors will grow impatient and simply charge-offs your account, and report it negatively to the credit bureaus.

For homeowners who have accumulated too much revolving debt, we suggest a debt consolidation loan that is secured to your home so you can deduct the interest for tax purposes, and save money with fixed rate simple interest loans. There is a commitment with these consolidation loans, because the must be paid back or you could loose your home. These debt consolidation loans are considered second mortgages, so if you don’t believe you can make the payments on time, then this option is not for you.

A successful debt consolidation loan requires you to make the monthly payments on time with consistency. Soon you will be in a position where your credit score have increased to the level that merits refinancing for a prime rate home equity loan that will lower your monthly payment even more.

If you do not qualify for a secured mortgage to consolidate your debt, consider debt settlement or bankruptcy.

By: Lynda Nelms

Learn How To Get A Mortgage While In Bankruptcy

admin — Wed, 27 Jan 2010 15:13:30 +0000

You are probably thinking how in the world can I get a mortgage while in Bankruptcy? Well guess what you can. In this article I will teach you what to do. Two of the most common bankruptcies among people are Chapter 13 and Chapter 7. Here are there attributes.

Chapter 13

Chapter 13 is where you set up payments with the court to a trustee. This typically takes place over 5 years. You will pay back a portion of what is owed to creditors. Chapter 13 stays on your credit report for 7 yrs.

Chapter 7

Chapter 7 is where you file bankruptcy through the courts, and dissolve all debt. This particular bankruptcy is looked at much more harshly with creditors and stays on your credit report for 10yrs.

Bankruptcy is usually the last resort when it comes to getting yourself out of a swamp of credit problems. I personally believe most people don’t want to file bankruptcy but have no choice once they do. Usually bankruptcy is stemmed from lots of debt. There is hope though when it comes to buying a home. I will tell you real quick, you cannot buy a home while in a Chapter 7. Banks will not touch you with a ten foot pole, usually for 2 to 3 years. You can buy a home while in a Chapter 13, only if your trustee gives you permission.

Requirements to get a Mortgage while in Chapter 13

1. Must have permission from Trustee

2. Must have a lender willing to finance you FHA

3. Must have a minimum 12 month payment history with Bankruptcy.

4. Cannot have any late payments after bankruptcy is filed

5. Cannot have any collections after bankruptcy is filed.

6. Must have 3 alternate lines of credit.

A. Examples:

a. Letter from electric company stating you have been on time with payment for last 12 months

b. Letter from Phone Company stating you have been on time with payments for the last 12 months

c. Letter from any utility company stating you have been on time with your payments for the last 12 months.

If you are in a chapter 13, and you meet all these requirements you should be able to get financed FHA. The first thing you need to do is pull a recent copy of you free credit report, and make sure you have not had any collections or slow pays on your credit report during bankruptcy.

By: Mike Clover

Home Mortgage – Part 4

admin — Tue, 26 Jan 2010 15:26:38 +0000

Obviously, you will not have this equity or the additional expenses if you decide to live in an apartment. And if you particularly dislike mowing and shoveling and such, an apartment gives you more relaxation time. Also, depending on your outside interests, you might find an apartment with pool facilities or a workout gym or tennis courts. Needless to say, if you are single, you will find more eligible bachelors and bachelorettes in an apartment complex then you will in a family neighborhood.

What this boils down to is that you must base your decision on whether to buy a house or rent an apartment on what you will feel comfortable with while fully realizing what the future might bring. However, this decision is not only for people starting out in life. It is important to read this section because we will be discussing the possibility of selling your present house and moving into an apartment in our section on saving money.

2nd Mortgage

Second mortgages can be a very bad trap for you. That is, you have been paying on your home mortgage for awhile and can now use the part of the house you have already paid for (your equity in it) as collateral on another mortgage. Therefore, you are right back where you started from. Unfortunately, it is the person who is deeply in debt already who is encouraged to get a 2nd mortgage. The idea is that this additional loan can be used for whatever you want and it is very tempting.

We continually see TV commercials for 2nd mortgages to pay off your huge debts. Does it really make sense to you to take on even more debt in order to pay off old debts? No, you know it does not.

By: Nate Perrott