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Posts Tagged ‘loan modification’

Have You Done Business With LoanModificationsFast.com?

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LoanModificationsFast matches people behind on their mortgage with service providers who can help them keep their home by modifying their existing loan. They claim to have helped over 100,000 consumers nationwide via their web site. Please post feedback on this company using the comment box at the bottom of this post.

Behind on Your Mortgage? LOAN MODIFICATION experts are standing by to re-do your existing loan.

What to do if you can’t afford your mortgage even after a loan modification? (askthemoneycoach.com)
2,500 Homeowners Put In Foreclosure While Awaiting Mortgage Modifications: Attorneys (huffingtonpost.com)
CitiMortgage Offers Assistance to Troubled Borrowers by Hosting Call-A-Thon (askamoneyexpert.com)

I can’t refinance my house without my husband’s signature. What should I do?

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Author: The Money Coach

Q: A bank won’t let a woman refinance her house without her husband’s signature. The problem is that the woman and her husband separated after being married for just one year, and the current mortgage is in her name only. What should she do?

A: I have a question from a reader who wanted to know about refinancing her home loan. She said, “I wanted to refinance my house in order to consolidate all my bills. I got married last year and now I’m separated. I bought my home alone without a co-signor but I was told by my bank recently that could not refinance my home without him. Him, I guess, being her estranged husband. She wanted to know what she could do. And also, is this legal?”

Well, the question is a good one because frankly, lenders have to abide by federal law which dictates what they can and can’t ask you with regards to getting a mortgage. Sometimes you might think that some of these questions are particularly intrusive or not relevant but in the lender’s mind, oh yeah, they are plenty much relevant.

For example, I suspect that your lender was saying you can’t “refinance without your ex” for one of two reasons. Either, one, they are saying to you that you don’t qualify on your own in terms of the debt to income ratio that might be different now than it was before when you first bought your home. Perhaps they’re saying also though that they are worried about the financial predicament in which you might find yourself post-separation and ultimately, post-divorce, if a divorce does in fact take place.

Obviously, a divorce is a personal matter but it also has major financial implications. So, it is not uncommon once you tell a lender that you’re separated or divorced for them to want to know some details about it. After all, divorced people, many of them actually go through bankruptcy subsequent to the separation. So, they’ll want to know things like – Are you getting or receiving alimony or paying alimony? Is there child support involved here? Which liability did you guys jointly rack up? Those kinds of things.

So it’s not uncommon for lenders to try to get information about your financial situation as it pertains to your spouse, your estranged spouse or your recently divorced spouse. So, what I would do is, seek a little bit of clarity from lender and because they certainly can’t or shouldn’t be saying to you as a woman that you cannot refinance or get a mortgage just because you’re a woman and because you need to have a man, or your husband or any other person on the loan. I suspect there are some other reasons why they’re saying you don’t qualify to refinance that home loan. Do find out what their credit score requirements are, how much equity that they say you need to have in the house, what kind of a debt to income ratio they want you to have. In other words, the percentage of bills that you are paying versus the amount of income that you are bringing in by yourself. All of those factors will matter greatly when it comes to approving that home loan you want and need.

How can I refinance my mortgage and get a lower interest rate?

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Author: The Money Coach

Q: I have a question from a reader who wants to know about getting a lower rate on her mortgage. She said, “I bought my house in 2007 and I now owe more than my house is worth. But I want to get a lower interest rate than the one I have right now. I can’t use the company that I’m paying my mortgage to because they’re just a mortgage broker. They now own my mortgage. I would like to get a lower interest rate though. How can I do it?”

A: Well, I hate to tell you this but you probably won’t be able to take advantage of these historically low interest rates that we are getting right now, that we’re seeing right now. Of course, recently, according to Freddie Mac and Fannie Mae, 30-year fixed rate mortgages have dropped to their lowest levels in decades. We’re talking about 4.35% or so. That’s amazing for anybody who wants to refinance their loan or do an initial home purchase.

The problem for you though, is that you said your house is under water. That you owe more than the house is actually worth. Think about the lender’s risk here. If you’re saying that you owe $300,000 on your mortgage, and I’m just making up a number here. But the house is only worth $250,000, why would a lender extend to you a new 30-year loan after you just got it three years ago, extend your payments again over time and give you fresh money for something that’s not worth that amount? They simply won’t do it. Your best bet is to look into one of the federal government programs that the Obama Administration has launched in order to help homeowners who are struggling with their payments, who are under water, who have recently lost their jobs, or who are otherwise finding their homes unaffordable. Check out the Making Home Affordable Program for more information.

Refinance with Cash out? (mytotalmoneymakeover.com)
Drop in mortgage refinancing overwhelms rise in loans to buy (usatoday.com)
Your First Home: The Smart Way to Get It and Keep It

Should I consider borrowing money from a subprime lender

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Author: The Money Coach

Question:

“During 2007, I was working a full‑time and a part‑time job. I lost the full‑time job due to a reduction in force with the federal government. I was paying my creditors until my unemployment was revised.

“My question is this. I tried to re‑mortgage my house. I tried to get a home equity loan, but it was denied. It was suggested that I contact a subprime lender. Who are they and where are they? My credit score is low, how can I get a loan to pay creditors and up my credit score? Why don’t the lenders take the reason why your credit is in such horrible condition into account?”

Answer:

There’s never been a better or more necessary time to improve your credit rating.

We’re all dealing with the ramifications of the credit crunch, and part of the reason why banks are being so particularly stingy with credit and lending at lower levels that they had been in the past, is that so many banks got burned.

There were multiple defaults on the mortgage side. Obviously we came through a period where we had the whole mortgage meltdown, and it wasn’t just on the subprime market. It was also among people who had good credit ratings as well.

In fact right now, the fastest‑growing group of consumers who are defaulting on their mortgages are so‑called prime customers, those with 700 and above FICO credit scores, who are walking away from their mortgages. Those are called “strategic defaults.”

A subprime lender, though, is one who makes loans to people with bad credit, but unfortunately those loans often have bad credit terms. There might be a pre‑payment penalty stuck into that mortgage. There might be a balloon payment stuck into that mortgage, or some other onerous terms that make it difficult.

For example, some people have subprime ARMs or adjustable rate mortgages. Essentially what that means is you might have an interest rate that’s fixed at one level today, but next year, for instance, the loan will reset or adjust upwards and be a higher rate, causing your monthly payment to increase.

I don’t know who told you to go to a subprime lender, but that wouldn’t be the approach I’d take. You need to be thankful that you actually are in a home right now. You shouldn’t trying to be trying to get a home equity loan, which I assume is in order to pay off some of your other debts.

The challenge for you is to really improve your credit rating so you can get a decent loan, the same kind of loan that would be given to anybody else with a positive and a good credit rating.

The subprime lending universe has by and large gone away in many areas and many aspects, because of financial reform and because of the whole tightening that we’ve seen among lenders, and at the federal level among organizations like Fannie Mae and Freddie Mac.

Here’s what to do to improve your credit. First of all, pay all of your bills on time. And I mean everything, on time, every single month. Even if you can only make minimum payments, do go ahead and make those payments.

Secondly, don’t close out any credit card accounts that you may have. I know you’ve probably heard that advice in the past, cut up those credit cards or close up those accounts. That can actually backfire on you and cause your credit score to drop. So don’t do that.

You also want to refrain from applying for new credit unless you really and truly need it. You know, 10% of your credit score is based on inquiries or new applications for credit. And each time you have an inquiry that pops up on your credit file, it can ding your credit rating.

And inquiry counts against you on your credit file for credit scoring purposes for one year, but that inquiry stays in your credit record for two years.

So try doing some of those things to boost your credit rating. You can also, of course, get your credit reports, free of charge, at annualcreditreport.com. Again, that’s annualcreditreport.com. You’ll be able to get your credit reports from Equifax, Transunion, and Experian.

You should check those reports to make sure that there are no mistakes. And actually consumer groups say that 70% of all credit reports do in fact have mistakes in them. So if those mistakes are also causing your credit scores to be low, you definitely want to dispute those errors and have those fixed.

The whole idea about re‑mortgaging or refinancing your home is probably something you should put off for now, until you can improve your credit rating, mainly because most banks will turn you down if you have bad credit anyway. It’s much more difficult to get a home loan in the current environment than it was just a few years ago.

I wish you the best, and I hope those tips are helpful to you.

Key Differences Between Equifax, Experian and TransUnion Credit Reports (askthemoneycoach.com)
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Posts Tagged ‘loan modification’