Archive for the ‘Uncategorized’ Category

Save Money Making Biweekly Mortgage Payments

Monday, April 19th, 2010

It’s important to understand the benefits of biweekly mortgage payments because the savings are significant.

A lender will collect about 3 times the amount of the mortgage loan you borrowed from the interest.  This can equate to hundreds of thousands of dollars in interest you pay.  Ouch!  The best way to eliminate a lot of the interest you pay to your lender is by setting up your mortgage payments on a biweekly schedule.

Here is a real example of the savings when paying your mortgage biweekly:

Loan amount is $200,000 and the interest rate is 5% on a 30 year loan.  The total amount of interest saved is $34,356.58 and the term is reduced by 4 years and 9 months.

Here is a biweekly mortgage calculator you can use to see the savings on your personal mortgage loan:  Biweekly Mortgage Calculator.

One of the best things about a biweekly payments is that you can start at anytime.  Even if you have 10 years left on your mortgage, the amount of interest you save in 10 years is still very significant.

Here is a site to educate yourself about the benefits of biweekly payments and see what industry experts have to say.

New Home Owner Energy Rebate Bill Proposed

Friday, December 11th, 2009

In an effort to further stimulate the economy while also working toward his goal of making the country more energy-efficient, President Obama proposed a new program this past Tuesday.

Although details remain unclear in regards to the new proposal, Steve Nadel, who is the director at the American Council for an Energy-Efficient Economy and who helped write the bill, reports that homeowners could receive up to $12,000 in rebates if they install energy-efficient appliances and insulation in their homes. Companies that specialize in renewable energy will also be eligible to receive funding through the program.

“[Energy efficiency] creates jobs, saves money for families, and reduces the pollution that threatens our environment,” President Obama is quoted as saying in a CNN Money article. http://money.cnn.com/2009/12/08/news/economy/president_energy/index.htm “With additional resources, in areas like advanced manufacturing of wind turbines and solar panels, for instance, we can help turn good ideas into good private-sector jobs.”

Not only is the bill intended to help stimulate the economy by encouraging homeowners to make new purchases, it will also create jobs for private contractors who will be responsible for conducting home energy audits and installing the necessary equipment to make the homes more energy-efficient. According to the details that have been released so far, homeowners would be eligible to receive up to a 50% rebate on the purchase of big-ticket items such as heating systems, air conditioners, refrigerators, windows, washing machines and insulation. They will also be able to receive a rebate of up to 50% on the cost of installation, with the maximum allowable rebate for equipment and installation being $12,000.

At this point, no income restrictions have been placed on the bill, but some critics are concerned that the bill could potentially have the opposite effect of its intentions on the economy. For example, consumers who are already struggling to make their monthly bill payments may try to take advantage of the rebates, only to find themselves in even more debt. Or, they may simply choose not to pursue energy-efficient purchases, which means the bill will do nothing to help spur the economy. Nonetheless, supporters of the $10 billion bill maintain that the bill will help to further move the economy in the right direction while also helping homeowners decrease their energy bills by as much as 20%.

Details regarding how the bill would be administered are still unclear. Potential methods include assigning state agencies to oversee the program, providing the rebates directly to consumers or providing reimbursement through a tax credit.

About the Author:
Eric Bramlett is the broker & co-owner of One Source Realty. He helps people find Austin Homes for Sale, Austin Condos, and Steiner Ranch Homes for Sale. Eric actively blogs & guest blogs on a number of sites.

New Administration: What This Means For HUD

Saturday, December 20th, 2008

President-Elect Obama announced that he would appoint Shaun Donovan to head up Secretary of Housing and Urban Development, or HUD. HUD is an important part of the mortgage industry, indirectly. This department is responsible for the housing within the country. In this administration, during this economy, this new Secretary will need to find ways to jumpstart the housing market to help individuals find the homes they need.

In his radio address on December 13th, Mr. Obama said this about the housing market: “To end this economic crisis, we must end the mortgage crisis where it began.” He continued, “This all started when Americans took out mortgages they couldn’t afford. Some were reckless, aware of the risks they were accepting. But many were innocent, tricked by lenders out to make a quick buck.” Later, he added, “This is deeply troubling. It not only shakes the foundation of our economy, but the foundation of the American Dream.”

Later in his broadcast, he mentioned that one in ten homeowners face some level of stress in regards to their homeownership.

What This Means To You

Depending on who you are and what your circumstances are, there is hope available. While the new administration will likely put in place programs to continue to support the housing within the country, there are many programs already in place to help struggling homeowners. Those facing foreclosure or the risk of getting behind on their mortgage should take the time now to contact an FHA loan specialist. Determine what your options are, including programs like HOPE for Homeowners and easy refinancing options already in place.

What about those who are looking for a home to purchase? Are they safe to buy? Many of the predator lenders are gone. They have lost their funding since investors are no longer willing to gamble with high risk mortgages. It is safe to borrow money. Commercial lenders are actively seeking borrowers who are qualified to borrow. Interest rates are very low and FHA loans are readily available to help those who are able to make payments to get into homes.

While you may not be able to improve the economic crisis fully, you can improve your financial security by considering new loans now. Home prices are low. Home interest rates on loans are low. Programs are in place for refinancing quickly and affordably. Determine if you qualify for a home loan through an FHA specialist. You may be happy to learn there are so many options available.

FHA Loan Inspections: What to Expect

Wednesday, October 1st, 2008

FHA loans used to be highly avoided by home sellers. Those who were selling their homes often requested only conventional loans because they worried about the complexities of loan inspections. FHA loans are insured by the federal government. That means that the government wants to be sure the value and condition of the home are high enough to warrant the mortgage and that they are safe to live in. The good news is that FHA loan inspections are much less complex than they used to be. The bad news is that you still have to have one to get into a home with an FHA loan.

While that’s the case, don’t worry too much about what goes into the FHA loan inspections. Even with conventional loans, you’ll want a home inspection. You want to know what hidden problems there are with a home. More so, you want to be sure that what you are getting is really worth the price you are paying for it. Therefore, view FHA loan inspections as opportunities to learn about problems you may not have noticed.

What They Are Looking For

What are FHA loan inspectors looking for? Once you apply for an FHA loan and have an offer on the home, the next step is to have an approved home inspector (who is working for FHA, not you, not the lender and not the home seller) come to the home. They will walk around, checking various aspects of the home. Most inspections take only 30 minutes to an hour to complete. You may wish to be present so you can learn of any defects or problems first hand.

There are some problems that they may require repairs to be made on before they will agree to funding the loan. Some potential problems include:

· The home has a defective roof; leaking roofs will need to be replaced or repaired. Age is less likely to be a factor assuming the roof doesn’t have any signs of leaks.

· Chipping paint may be a problem, especially in an older home.

· Handrails may need to be installed on steep steps without them.

· Windows that are broken may be a problem, though sticking or cracks may not warrant replacement.

It’s important to note that the FHA loan inspector that comes to your home is not doing the job of a professional home inspector working for you. If there are problems with the home’s inspection, the repairs will need to be made before the loan can be funded. The home seller often does repairs, but in some cases, the home buyer can do them. Once complete, the loan will move along the financing process.

No More Presidential Opposition to Housing Bill

Wednesday, July 23rd, 2008

It was reported today that President Bush has reversed his pledge to veto the Housing Bill. According to the New York Times, Secretary of the Treasury Henry Paulson is to credit for Bush’s change of heart:

But Mr. Bush set aside those objections on the advice of the Treasury secretary, Henry M. Paulson Jr., who told him that the overall package was necessary to help stabilize the housing and credit markets, according to the White House press secretary, Dana Perino, who announced the switch Wednesday morning. Ms. Perino said the gravity of the crisis, coupled with Congress’ plans to recess next week, was the reason for the reversal.

There is still a possibility that the bill will be held up in the Senate, but a huge obstacle has just been overcome.

FHA Q & A: Facing Foreclosure

Monday, June 30th, 2008

I was recently contacted by a couple asking for advice on their housing situation. Due to the recent market conditions, their house has greatly depreciated in value and their payments have become too much to handle. They are currently trying to work with their lender, but are still concerned about losing their home. What should they do?

I have a few major pieces of advice. First, contact a housing counselor immediately. Through the HOPE NOW program, housing counselors can help you figure out your options and, hopefully, avoid foreclosure. Plus, the counselors are available free of charge, so you’d be crazy not to take advantage of it. Distressed borrowers can call HOPE NOW directly at 1-888-995-HOPE (4673) to get started on the process.

Additionally, you need to stay on top of your lender. Lenders like Countrywide are already notorious for their poor customer service and are also working with many other borrowers in your exact situation. Don’t count on them to take care of things without a little pressure. Also, don’t be afraid to negotiate. When you lose your home, they lose money; so they should be willing to make concessions to keep you in your home.

Lastly, don’t count on pending legislation or litigation to save you. Although states like Illinois are pressing for restitution from Countrywide, no one should wait on a decision like that (which could take years) to be helped out with current mortgage problems.

Basically, take things into your own hands and be persistent.

House Abandonment

Monday, March 10th, 2008

I want the readers to know from the outset that my heart goes out to people that feel this is their only option. I can imagine they feel this way because they do not believe someone has reached out to them in a manner they can understand. Let me paint this picture and you tell me how you would feel.

You are working and everything is going along well at the job. Your wife has a good job, the children are in school and it appears that everything is peachy keen. Bills are being paid on time and you have never been late. You have no idea what is about to happen. One day you go into work and they tell you, they are having company wide layoffs and you have fallen into that category. Unfortunately the layoff is effective immediately. There is no discussing it and everyone has to leave within your department. As you are leaving, you contact your wife at work to share what happened because you are absolutely stunned at this news. She says you will discuss it more tonight. You are semi-reassured thinking she will have a plan.

Later on that evening as you begin discussing the household finances to include the mortgage payment, you discover within two months you be in a financial hole without that regular income. You will not be able to pay your mortgage nor other bills. So your first thought it to begin searching for employment. However when that two month period rolls around you have not gotten a job. Now you and your wife have some choices to make. Bills are piling up and you didn’t pay all your bills from the month before. You are receiving creditor phone calls and you do not even want to answer the phone. You begin using a one credit card to pay another and juggling your bills. The next month rolls around and you are receiving calls from your mortgage lender. Instead of answering the phone or even looking at your mail, you have chosen to take no action.

Right about three months and two days, you have decided to move out in the middle of the night. You have felt like you have no choice. You were upside down on your mortgage and have felt there was not an easy option. You returned the house keys to the lender and literally walked away. I have to tell you as I was reading an article on the internet about this, there was a company that started titled Youwalkaway.com to assist people. I have to tell you I will go and read about this as well.

Before you walk out of your home make sure that you talk to a competent and reliable person within the home ownership industry. You might be surprised especially if you find out that you lender has been attempting to contact you and has viable options that assist you in keeping your home. However, you have been too afraid to answer the phone because you do not want any more bad news. You might be surprised at what you hear on the other end of the phone.

Dr. Taffy Wagner

Things Are Looking up in Ohio

Thursday, February 28th, 2008

As I reported waaaayyy back in June, Ohio had the lead in foreclosures nationwide. In an article last week, the Columbus Dispatch detailed just how FHA can help Ohioans get back on track. According to the article, 1,400 Ohioans refianced to FHA Loans last month. In total, FHA has helped 4,400 Ohio citizens refinance since the program was introduced.

Alphonso Jackson also made an encouraging visit to Columbus:

More struggling homeowners need to take advantage of that program or others offered to prevent foreclosure, Jackson said. Too many avoid calling their lenders for help and end up losing their homes instead of being offered the chance to tap an FHA program.

“We are committed to finding solutions that can sustain families through times of uncertainty as we push toward renewed economic vibrancy,” he said. “That means giving them an avenue to refinance from subprimes into safe, affordable mortgages.”

The article also details the Project Lifeline program in a sidebar.

FHA Q&A

Thursday, January 31st, 2008

Reader Gerald asked, Does either of the packages address whether or not PMI will be required with deposits of less than a certain percentage, and what would that percentage be?

Actually, FHA loans do not use PMI, but rather mutual mortgage insurance (MMI). MMI is made up of an upfront mortgage insurance premium (MIP) and monthly mortgage insurance (MI).

The upfront MIP is required for all borrowers with less than a 20% down payment. On a 30-year fixed-rate loan the MIP is 1.5% of the total loan amount. Any unused portions of the MIP can be refunded within 84 months of loan term (7 years).

The monthly MI is .05% of the total loan amount per year. Borrowers who put down at least 10% on a 15-year loan are exempt from paying monthly MI. For the rest of borrowers paying monthly MI, it is cancelled after 78% of the principle has been paid off. For this cancellation to happen, borrowers must have made all MI payments on a 30-year loan for five consecutive years.

FHA Q&A

Friday, January 18th, 2008

I recently received the following question from reader Sandra:

The average home price where I live is $525,000. Will FHA ever raise the loan limits, so that areas that have a higher average price can utilize the program? Also what is the required down payment? I had recenly heard that it was to be reduced from 3% to 1.5%

As for now, FHA loan limits aren’t going to be changing. However, current legislation (HR 1852, which has passed in the House) includes an amendment proposing the loan limit be set at lower of either

  • 125% of the local median home price, or
  • 175% of the national GSE conforming limit

This bill may be combined with a Senate bill, but both seek to increase loan limits to make FHA loans a realistic option for more buyers. As for the down payment, it is still a toss up as to what the agreed-upon change will be. Although nearly all legislators seek to remove the 3% down payment, there is disagreement on whether it should be zero down or the 1.5%, which could be packaged into fees. In my opinion, the 3% isn’t terrible (look where a lot of the subprime borrowers who didn’t put up any cash ended up), but a lower down payment could certainly make homeownership possible for many more Americans. I’d predict that in the next 6 months or so the 1.5% will be the new minimum.

Thanks to Sandra for the question! If you have a question, please leave it as a comment or send an email to admin@fhabook.com