Ask The Money Coach

Posts Tagged ‘Mortgage loan’

During a recent interview on ABC News NOW, Lynnette Khalfani-Cox, The Money Coach  gave viewers the following  5 easy to use tips to help them save more money.

Save on Your Car: Many people don’t realize that you can refinance your car loan just as you can refinance a mortgage.  A car refinancing is faster, simpler to do and costs virtually nothing. Average savings: $1300 over the life of the loan.

Save on Utilities: You can save up to 10 percent on your energy bill just by unplugging appliances when they aren’t in use. So unplug that toaster, coffee pot, or any other small item that may be on your kitchen sink when it’s not being used.

Save on Everything Online: Hop on the Internet for the best money-saving deals. Not only can you comparison shop for everything from clothing to electronics, but you can also learn how to save from savings-oriented websites like EndangeredSavers.com.

Save on Medicine and Prescriptions: Just buying generics can save big bucks. The average name brand prescription costs $100. The generic version of the average pill/prescription usually costs just $30 – a 70% savings!

Save on Household Items: We all need toothpaste and deodorant, right? Save money by buying these products in the right form. For toothpastes, reach for the tubes, not the pumps. Tubes offer more bang for your buck. With deodorants, go for the stick or roll-ons, not aerosol cans, which get used up much faster and are less effective.

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By Lynnette Khalfani-Cox for Housingwatch

Move-up buyers and baby boomers who are scaling down their lifestyle actually represent the biggest numbers of those who are snatching up homes with all-cash deals, experts say.

Jed Smith, an economist and managing director of quantitative research at NAR, broke down the numbers for HousingWatch:

• Wealthy foreigners: 2 percent
• Investors: 12 percent
• Repeat buyers: 86 percent

Right now, NAR is forecasting 5.4 million existing-home sales in the U.S. for 2010.

According to Smith, foreigners account for about 4 percent of all U.S. existing-home sales. Investor activity makes up roughly 18 percent all of property sales. The remaining 78 percent of home purchases are made by first-time buyers (40 percent) and repeat buyers (38 percent).

Since about half of all foreigners pay outright for real estate, Smith says, that means wealthy foreigners represent a total of 2 percent of all-cash buyers. Based on Realtor feedback, Smith says a majority of investors are paying cash. So he estimated that about 12 percent of the all-cash market is derived from investors. The remaining 86 percent of all-cash buyers is from those with enough assets to buy without a mortgage.

Who make up that last group? They certainly aren’t first-time buyers. Most first-timers have a hard enough time coming up with a down payment; recently, most have been putting down 3 percent to 5 percent to buy their homes, and then getting a mortgage to finance the purchase.  - Read the rest of this article on Housingwatch

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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.

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Even though home prices and interest rates have come down dramatically, many Americans aren’t able to qualify for mortgages because they have bad credit, a new survey reveals.

According to a recent study nearly 30 percent of all Americans searching for home loans are effectively locked out of the conventional mortgage market because their FICO credit scores fall below 620. (See AOL Real Estate’s guide on “How to Get a Home Loan With Bad Credit.”)

The fact that so many Americans have poor credit ratings isn’t necessarily new information. Experian, one of the big three credit bureau, and Fair Isaac, creator of the FICO credit score, have each found that about 40 million to 45 million Americans have bad credit, or scores of of less than 600.

Read the rest of Lynnette’s article on Housing Watch

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