Mortgage Rate PA

Will A Refinance Mortgage Loan Make Sense For You?

John — Thu, 29 Mar 2012 17:22:54 +0000

Will A Refinance Mortgage Loan Make Sense For You?

Have you been looking for a way to finance college education for your kids? Does the vacation of a life time seem like only a dream? Or maybe you want to buy a new car and deduct the interest on your federal taxes?
How about cash for some home improvements? Maybe you just want a way to buy your dream house while your old house is being sold. If any of these scenarios sound familiar, the maybe you will want to look into
getting a refinance mortgage loan. They are still available even in this strange mortgage enviroment & the rates are still fantasticly low.

What does refinancing your mortgage mean? In simple terms it means that you will renegotiate your mortgage loan. When people pay down the principal on their mortgage, they build up equity and by getting a
refinance mortgage loan, they can tap into that equity. Because of this, refinance mortgage loans are also known as home equity loans as the meaning is the same. What does it mean when you have equity in your
home? It simply means that your home is worth more than what you owe on it.

For instance, if the market value of your home is one hundred thousand dollars and you owe only ninety thousand dollars you will have ten thousand dollars of equity in your home. A refinance mortgage loan is available
from lenders, if you have some equity in your home. You can choose to receive cash to get something that you are wanting such as college fund money, a vacation or home improvements. Refinancing can make good
financial sense so that may be your other reason.

When a person is first purchasing their home they may have to take unsatisfactory mortgage terms due to low or bad credit histories. As time goes by, your credit score may be better or the prime interest rate may be
lower than when you first bought your home. If the prime rate has lowered then you will be able to refinance your mortgage loan with a lower rate of interest which can save quite a bit of money and reduce your monthly
payment. Will it make sense to refinance your mortgage loan? For many people it does make sense. For others, they will see no significant advantage.

If you are thinking of using your home equity, talk to a qualified financial planner so you will understand your particular options. Many home owners find that refinancing is much better than getting a different loan that
will not give them any tax benefits like a home equity loan would.

Many refinance mortgage loans will have a lower interest than a student loan, so it can pay off to explore all of your options to be able to make an informed decision.

By: John Walko
For: MortgageRatePA.com — Your Mortgage Personal Assistant.

Can Your Ex Trash Your Credit Score?

John — Tue, 08 Mar 2011 16:17:48 +0000

Can Your Ex Trash Your Credit Score?

By: Martha C. White

Naomi Allen, a state government employee in Ohio, thought she was doing the “right thing” when her marriage dissolved in 2007. As the more financially savvy of the couple (she’d helped her then-husband raise his credit score several years back after discovering it was too low to qualify for a mortgage), Allen took it upon herself to refinance her mortgage so her ex wouldn’t have a legal obligation to that debt.

Allen settled with the help of her divorce lawyer on an agreement that split roughly $12,000 in jointly carried credit card debt down the middle, and extracted a promise from her ex that he’d repay an additional $7,000 charged to a jointly-held card after the two had separated.

Then her ex refused to pay, and Allen learned that creditors don’t care whether or not you’re doing the “right thing” or how the divorce courts assign responsibility for payment. For them, it boils down to this: If your name is on the account, you’re legally liable.

“I was going to have to pay it because my name was on those cards and he didn’t do what he was supposed to do,” she says. Allen struggled to pay both her and her ex’s obligations, but when the financial meltdown hit in 2008 and issuers raised her interest rates to as high as 24%, she fell behind and began defaulting. She’s scheduled to file for a Chapter 13 bankruptcy next week to avoid the prospect of wage garnishment or losing her house (on which she’s kept current in her payments).

Breaking Up with Lenders Is Hard to Do

While each of us has an individual credit history, report and score, the actions of a romantic partner — especially an estranged or ex-partner — can still skewer an unsuspecting person’s score.

“The divorce is from your spouse, not your lenders,” says John Ulzheimer, president of consumer education for SmartCredit.com. “If the accounts are mismanaged even after the divorce, then it will still hurt both spouse’s scores,” he tells WalletPop, adding that what he terms “malicious spending” is unfortunately common in acrimonious divorces.

“Where it can get dicey is if you have joint credit accounts or joint loans where both names are on them,” says Gail Cunningham, vice president of public relations for the National Foundation for Credit Counseling. “If somebody’s mean spirited enough, they don’t care if their credit tanks. They’re just vindictive enough to take it out on the ex-spouse.” Allen says this is what happened to her, adding that even as she struggled to pay for groceries, her ex tried to have his child-support payments for their two children lowered.

While we can’t touch on all the reasons a marriage can fail, the first step to avoiding a financial firefight is to have a frank talk about money, spending and finances early in the relationship, says Adam Levin, chairman and co-founder of Credit.com. “You really need to have as much of a big talk about credit as you do about all the other things. Before you exchange vows, it’s not a bad idea to exchange credit reports.”

It’s a common impulse for the partner with stronger credit to want to lend a hand by cosigning a loan or adding them as an authorized user to a credit card account. But if the relationship goes south, this charitable gesture could come back to haunt you.

An alternative, if you want to help out a partner with poor credit without placing your own at risk, is to offer an asset — say, a CD or small amount of saved money — that can be used as collateral for a loan or as the backing for a secured credit card. Yes, you run the risk of that money disappearing if your partner takes advantage of your generosity, but you’ll avoid having your credit score dragged through the mud.

Divorcing Yourself from the Debt

When a partnership is on the rocks or headed for a split, experts say the best way to protect yourself is to move quickly and disengage yourself from the other party financially. “It’s particularly important to do this before divorce proceedings in case your disgruntled spouse racks up charges you’ll be held responsible for later,” says Loretta Worters, vice president of the Insurance Information Institute.

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As long as there’s an outstanding balance on a joint account, both parties are responsible for payment. Generally, any debt incurred by one spouse is also the responsibility of the other, regardless of whose name is on the account until after the divorce. SmartCredit’s Ulzheimer says it’s crucial to close joint credit cards and remove your spouse as an authorized user.

If you only have joint credit cards — a precarious position to be in — you first need to establish a line of credit of your own. Since processing an application for credit can sometimes take several days, it’s not a bad idea to do this just in case, even if there’s presently no discord in the relationship. Recent changes to the law may make it more difficult for stay-at-home spouses with no independent income to obtain credit, so it’s important to get credit when you can.

When you’re closing those joint accounts, don’t forget about retail cards, says Ulzheimer. “I can tell you sometimes consumers forget about them, those retail store cards that you only use periodically,” he says. “If they’re still joint accounts, they’re just as dangerous.”

Believe it or not, credit cards are the easy part of the equation. Barry Paperno, consumer operations manager at MyFICO.com, told WalletPop it’s much tougher for couples to untangle installment loans like car loans or mortgages — for which both partners might have signed on to qualify for the loan or for a better rate.

Divorce or not, Paperno says, a mortgage in both names means you’re going to have a relationship for as long as that loan is in place. Ideally, one partner could buy the other out of a car loan, but it’s almost impossible to refinance into just one partner’s name without paying a hefty amount, since cars generally depreciate faster than they’re paid off.

These days, with the real estate market still struggling, the same holds true for many homes. Ideally, the spouse who wanted to stay in the house would refinance the loan in just his or her name, as Allen did. Today, though, so many homes are under water and lenders have tightened their standards so much that a single income might not be enough to qualify for a new mortgage.

Keep Frequent Tabs on Your Credit Report

Experts say the best thing you can do if you’re in the process of a separation or a divorce is to keep a close eye on your credit report. “As early as possible in the divorce process, pull the most recent copy of your individual credit reports from one of the three main credit bureaus,” says Worters. “This is something you should do at least once a year, but it’s especially important after major life events such as a divorce. By checking your credit score, you can see if your credit’s been adversely affected by the impending divorce. It will also show if there are any shared debts that are being neglected and can point both of you in the right direction when canceling any joint accounts.”

MyFICO’s Paperno says people getting a divorce or separation should seriously consider a credit-monitoring service, both so that they can make sure that their spouse is making good on his or her payment promises as well as ensuring that their soon-to-be ex isn’t taking out loans in their name.

“It’s a good idea for people to protect themselves through a credit monitoring service,” he says. Paperno points out that while identity theft might not be something most of us think about on a daily basis, a former partner has all kinds of information, like your Social Security number and mother’s maiden name, that could give them the key to fraudulently obtain credit.

As for Allen, she’s hoping the bankruptcy settlement — which will put her on a five-year repayment plan, after which the remainder of her debts will be discharged — will help her put her credit nightmare behind her. It’s a bitter pill, she says, that she tried to follow the rules only to have her credit score dragged through the mud, but she’s looking forward to the future. She says she’s already planning to sign up for a secured or low-limit credit card as soon as she’s eligible to apply for one to start rebuilding her score. “I just want to live my life and pay down my debts,” she says.

11 Tips for a smart consumer

Hud.gov — Mon, 28 Feb 2011 03:44:53 +0000

Protect Yourself from Predatory Lenders

Buying or refinancing your home may be one of the most important and complex financial decisions you’ll ever make. Many lenders, appraisers, and real estate professionals stand ready to help you get a nice home and a great loan. However, you need to understand the home buying process to be a smart consumer. Every year, misinformed homebuyers, often first-time purchasers or seniors, become victims of predatory lending or loan fraud.

Don’t let this happen to you!

11 Tips On Being A Smart Consumer

Before you buy a home, attend a homeownership education course offered by the U.S. Department of Housing and Urban Development (HUD)-approved, non-profit counseling agencies.

Interview several real estate professionals (agents), and ask for and check references before you select one to help you buy or sell a home.

Get information about the prices of other homes in the neighborhood. Don’t be fooled into paying too much.

Hire a properly qualified and licensed home inspector to carefully inspect the property before you are obligated to buy. Determine whether you or the seller is going to be responsible for paying for the repairs. If you have to pay for the repairs, determine whether or not you can afford to make them.

Shop for a lender and compare costs. Be suspicious if anyone tries to steer you to just one lender.

Do NOT let anyone persuade you to make a false statement on your loan application, such as overstating your income, the source of your downpayment, failing to disclose the nature and amount of your debts, or even how long you have been employed. When you apply for a mortgage loan, every piece of information that you submit must be accurate and complete. Lying on a mortgage application is fraud and may result in criminal penalties.

Do NOT let anyone convince you to borrow more money than you know you can afford to repay. If you get behind on your payments, you risk losing your house and all of the money you put into your property.

Never sign a blank document or a document containing blanks. If information is inserted by someone else after you have signed, you may still be bound to the terms of the contract. Insert “N/A” (i.e., not applicable) or cross through any blanks.

Read everything carefully and ask questions. Do not sign anything that you don’t understand. Before signing, have your contract and loan agreement reviewed by an attorney skilled in real estate law, consult with a trusted real estate professional or ask for help from a housing counselor with a HUD-approved agency. If you cannot afford an attorney, take your documents to the HUD-approved housing counseling agency near you to find out if they will review the documents or can refer you to an attorney who will help you for free or at low cost.

Be suspicious when the cost of a home improvement goes up if you don’t accept the contractor’s financing.

Be honest about your intention to occupy the house. Stating that you plan to live there when, in fact, you are not (because you intend to rent the house to someone else or fix it up and resell it) violates federal law and is a crime.

Tips to Avoid Foreclosure.

Hud.gov — Mon, 28 Feb 2011 03:29:44 +0000

If you are unable to make your mortgage payment:

1. Don’t ignore the problem.

The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem.

Lenders do not want your house. They have options to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender.

The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notices of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.

4. Know your mortgage rights.

Find your loan documents and read them so you know what your lender may do if you can’t make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.

5. Understand foreclosure prevention options.

Valuable information about foreclosure prevention (also called loss mitigation) options can be found online.

6. Contact a HUD-approved housing counselor.

The U.S. Department of Housing and Urban Development (HUD) funds free or very low-cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender, if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.

7. Prioritize your spending.

After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses–cable TV, memberships, entertainment–that you can eliminate. Delay payments on credit cards and other “unsecured” debt until you have paid your mortgage.

8. Use your assets.

Do you have assets–a second car, jewelry, a whole life insurance policy–that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don’t significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies.

You don’t need to pay fees for foreclosure prevention help–use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month’s mortgage payment) for information and services your lender or a HUD-approved housing counselor will provide free if you contact them.

10. Don’t lose your house to foreclosure recovery scams!

If any firm claims they can stop your foreclosure immediately and if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional or a HUD-approved housing counselor.

Tips for Selling your Home.

BankRate.com — Wed, 23 Feb 2011 15:29:04 +0000

When you sell a house in a buyer’s market, a lot of things work against you. Your real estate listing shouldn’t be one of those things. Find out what buyers and their agents typically see as a red flag in a listing and how to avoid them.

Take Photos

1) Including photos in the listing should be a no-brainer, but sellers routinely list properties without pictures, and they do so to their detriment, says Don Tepper, a Realtor with Long & Foster in Burke, Va.

“One red flag in many buyers’ eyes is the lack of photos for a listing,” Tepper says. “There can be some legitimate reasons for few (or no) photos in a listing: The sellers want privacy, or they have valuables they don’t want in the photos. But many would-be buyers — rightly or wrongly — assume that there’s something wrong.”

Tepper says it’s a good idea to have about a dozen photos. But that number isn’t a hard and fast rule. You want to convey a good sense of the property by ensuring the pictures match the description and showcase the features you highlighted. If the listing emphasizes a great view, it pays to have a photo of the view.

Give Details

2) In the last few years, buyers have had a crash course on buying distressed properties, whether short sales or foreclosures. But that experience hasn’t always been good, and according to Karl J. Trommler, business development manager for PenFed Realty in Reston, Va., a big red flag is a distressed property listing without transaction details.

“When the listing says it is a short sale, but does not address whether or not the lender has been informed and approved of the price, it can be a big red flag,” says Trommler, who cautions against getting involved when the listing language refers to third-party approval, but fails to identify that party.

Simply put, the more parties involved in the transaction, the more complicated. Short sellers who are able to be upfront about the deal stand a far better chance of attracting the right buyer at the right time, Trommler says.

Don’t Exaggerate

3) A listing that claims to offer the very best property on the market might not do the seller any favors, says Ziad Najm, a broker at Cedar Real Estate in Mission Viejo, Calif. He cautions against outlandish and hyperbolic claims.

“While creativity should be maximized to market a listing, these claims can be highly subjective and can be interpreted in many ways by different buyers,” Najm says. “Some buyers may be turned off to begin with and some will inevitably be disappointed if the claim doesn’t live up to their expectations.”

It’s a fine line, but according Najm, sellers do well to stay away from superlative claims. So rather than describing the house as “the best,” a more sensible strategy is to focus on adjectives that are flattering, but leave room for other opinions.

Don’t Low Ball

4) A low price sounds like a great way to attract buyers, but if you go too low, there’s a chance your strategy can backfire. When a seller’s agent suggests such a strategy, the homeowner should be on guard.

“Typically, multiple buyers will be attracted to the low asking price and eventually the sales price will climb close to market value as competing offers bid up the price,” Najm says. “However, the strategy is not without risk in that some buyers will be alienated by a potential bidding war.”

Even more worrisome is the possibility that a low price will attract unqualified buyers looking to snatch up a bargain. If that happens, the house won’t sell at all, and the seller will have devalued the property with a low listing price.

So if you’re going to gamble on a low listing price, Najm says, “it’s very important to have a solid knowledge of market conditions before using this kind of high-risk, high-reward strategy.”

Key Phrases

5) Believe it or not, phrases such as “newly remodeled” and “recently updated” can be red flags to some buyers because they could indicate that the seller is out to flip the house. That’s not necessarily a bad thing, but sellers should work to highlight any improvements while being careful not to present the home as a flip, according to Vince Clingenpeel, whose Clingenpeel Properties in Falls Church, Va., inspects homes on behalf of buyers.

“The biggest fear I have for buyers is the flip,” Clingenpeel says. “In my experience, one out of 20 is properly executed with proper permits.”

While a lack of proper permits might mean a headache for a buyer, Clingenpeel reports that buyers of flipped homes sometimes find that the quality of the work done is “horrendous.” So if you’re selling a newly remodeled home, make sure to emphasize that the work was properly permitted and executed at a level any homeowner would be happy with.

AS IS

6) Selling a property “as is” isn’t all that unusual, and it shouldn’t be a deal breaker. But when you see the term in a listing — especially these days — it can be a reason for caution, says Diane Conaway, a San Diego broker with Re/Max United.

These days, “as is” can mean “previous owners stole everything including the kitchen and bathrooms,” Conaway says. “Our contract states ‘as is’ anyway, but some agents restate that in the listing, which is a disservice to their sellers.”

While listing a property’s shortcomings has its drawbacks, Conaway believes it’s better to include obvious improvements a buyer will want to make, rather than saying “as is.” If it’s clear that the house needs new carpet, Conaway says it’s better to just say so because any serious buyer will likely use that as a negotiation point anyway. But if you list the property “as is,” you could make the buyer think the worst.

10 Questions to ask a Home Inspector!

Hud.gov — Tue, 22 Feb 2011 03:02:30 +0000

1. What does your inspection cover?

The inspector should ensure that their inspection and inspection report will meet all applicable requirements in your state if applicable and will comply with a well-recognized standard of practice and code of ethics. You should be able to request and see a copy of these items ahead of time and ask any questions you may have. If there are any areas you want to make sure are inspected, be sure to identify them upfront.

2. How long have you been practicing in the home inspection profession and how many inspections have you completed?

The inspector should be able to provide his or her history in the profession and perhaps even a few names as referrals. Newer inspectors can be very qualified, and many work with a partner or have access to more experienced inspectors to assist them in the inspection.

3. Are you specifically experienced in residential inspection?

Related experience in construction or engineering is helpful, but is no substitute for training and experience in the unique discipline of home inspection. If the inspection is for a commercial property, then this should be asked about as well.

4. Do you offer to do repairs or improvements based on the inspection?

Some inspector associations and state regulations allow the inspector to perform repair work on problems uncovered in the inspection. Other associations and regulations strictly forbid this as a conflict of interest.

5. How long will the inspection take?

The average on-site inspection time for a single inspector is two to three hours for a typical single-family house; anything significantly less may not be enough time to perform a thorough inspection. Additional inspectors may be brought in for very large properties and buildings.

6. How much will it cost?

Costs vary dramatically, depending on the region, size and age of the house, scope of services and other factors. A typical range might be $300-$500, but consider the value of the home inspection in terms of the investment being made. Cost does not necessarily reflect quality. HUD Does not regulate home inspection fees.

7. What type of inspection report do you provide and how long will it take to receive the report?

Ask to see samples and determine whether or not you can understand the inspector’s reporting style and if the time parameters fulfill your needs. Most inspectors provide their full report within 24 hours of the inspection.

8. Will I be able to attend the inspection?

This is a valuable educational opportunity, and an inspector’s refusal to allow this should raise a red flag. Never pass up this opportunity to see your prospective home through the eyes of an expert.

9. Do you maintain membership in a professional home inspector association?

There are many state and national associations for home inspectors. Request to see their membership ID, and perform whatever due diligence you deem appropriate.

10. Do you participate in continuing education programs to keep your expertise up to date?

One can never know it all, and the inspector’s commitment to continuing education is a good measure of his or her professionalism and service to the consumer. This is especially important in cases where the home is much older or includes unique elements requiring additional or updated training.

Do you need a Refinance?

rachel — Sat, 19 Feb 2011 17:37:28 +0000

At the time when you mortgaged your home and bought it you might have had the money to pay the monthly installment. But, unforeseen factors like losing your job may be preventing you to pay back the loan. Your house will be seized if you do not pay up. What do you do in a situation like this? You could opt for a refinance of the mortgage.

If you are unable to get the new loan on a lower rate than the first, then it is advisable not to opt for it at all. Taking the new loan on a higher rate than the previous one will only put you further into trouble.

Refinance has been the solution to a lot of mortgage problems. However, you need to contact the right agency to take care of it. There are plenty that you will come across if you check the internet. But, not all of them are reliable. There are a few that may take you for a ride. You need to be careful of such agencies.

Refinancing your mortgage is only advisable if it is going to benefit you. You should make a comparison of the cost of your current loan, and the cost of a refinancing loan. If the cost of the refinancing loan is lower than the current loan then you should refinance.

The amount you get as the refinancing loan may vary. Some may give you an amount that is equal to that of your first loan; while others may give you less than that.

The agency will consider a few important factors before sanctioning your loan. They are:

1. How able are you to pay back the loan. It is important that you or your partner have a regular job with a regular payment. You need to show that you are capable of paying back the money you have taken.

2. Your credit history needs to be clean. They will do a thorough check on your credit history before sanctioning the loan.

3. If you are paying up any other loans besides the mortgage one, then you will need to supply the refinancing firm with the details.

Refinancing can be a blessing in disguise if you use it correctly.

However, think carefully before you opt for refinance.

Let me explain how this works. When you refinance the mortgage, what you are actually doing is taking a new loan on a lower interest rate to pay up the first loan. What you need to remember is that while this refinance loan will take care of the first loan, you will still need to pay up the new loan.If you are unable to get the new loan on a lower rate than the first, then it is advisable not to opt for it at all. Taking the new loan on a higher rate than the previous one will only put you further into trouble.Refinance has been the solution to a lot of mortgage problems. However, you need to contact the right agency to take care of it. There are plenty that you will come across if you check the internet. But, not all of them are reliable. There are a few that may take you for a ride. You need to be careful of such agencies.Refinancing your mortgage is only advisable if it is going to benefit you. You should make a comparison of the cost of your current loan, and the cost of a refinancing loan. If the cost of the refinancing loan is lower than the current loan then you should refinance.The amount you get as the refinancing loan may vary. Some may give you an amount that is equal to that of your first loan; while others may give you less than that.The agency will consider a few important factors before sanctioning your loan. They are:1. How able are you to pay back the loan. It is important that you or your partner have a regular job with a regular payment. You need to show that you are capable of paying back the money you have taken.2. Your credit history needs to be clean. They will do a thorough check on your credit history before sanctioning the loan.3. If you are paying up any other loans besides the mortgage one, then you will need to supply the refinancing firm with the details.Refinancing can be a blessing in disguise if you use it correctly.However, think carefully before you opt for refinance.