The Finance Factor

Are you considering purchasing a new home? If you are, you should know that this may very well be a very good time to buy a house. The housing market is sluggish, which means that prices tend to be lower and so do interest rates. Also, there are more houses from which to choose. This surplus of houses on the market is good for the buyer; basic laws of supply and demand dictate that the more there is of something (in this case houses), the less it tends to cost.

If you are going to purchase soon, however, it is important that you understand the terminology used regularly in the real estate world. Common mortgage terms include interest rates, length or term of loan, closing costs, variable rate loans, origination fees, document taxes, home equity, acceleration, amortization, conventional financing, down payment, FHA loans, fixed rate loans, points, and private mortgage insurance (PMI).

The interest rate is the amount of money the lender is charging you in order to borrow the loan. This is expressed in terms of percent. Of course, the lower the interest rate, the less the cost of the loan.

Continue reading ‘Hot Mortgage Terms You Need To Know’ »

Besides the great prices you can find in the real estate market today, there are a number of reasons to purchase a home before the end of 2009. One of these reasons is the federal housing tax credit that was recently passed in the stimulus package earlier this year. This federal credit offers a financial break to those who purchase a home before December 1, 2009. If you or someone you know plan on purchasing a home this year, you should consult a mortgage loan specialist for all the details regarding the 2009 federal housing tax credit.

The federal housing tax credit applies to homebuyers of all types in the year 2009. The American Recovery and Reinvestment Act states that any homebuyer purchasing a home in the year 2009 can apply to receive a tax credit of 10% of the price of the home. The maximum dollar amount for the tax credit, regardless of how much your new home may cost, is $8,000. This basically means that for purchasing a home costing $80,000 or more, you can receive an $8,000 tax credit for the year. If your home costs $70,000, you will receive 10% of that purchase price, which comes out to $7,000.

Any type of homebuyer is eligible to purchase a home in 2009 and qualify for this year’s federal housing tax credit. You don’t have to be a new homebuyer, but you also don’t have to have already purchased a house in the past either. Whether you are a new homebuyer or a seasoned home buying veteran, you can purchase a house in 2009 and claim the federal housing tax credit.

Continue reading ‘Federal Housing Tax Credit of 2009 Can Save You Money’ »

It was not too long ago when self employed borrowers were able to qualify for mortgage financing with stated income and no documentation loans. With stated income mortgages, lenders simply asked borrowers to “state their income”. If their credit was decent, their income seemed plausible for their industry, and their home appraised, they likely were able to obtain financing. With a no-doc mortgage, lenders typically just based their qualifying decision upon the borrowers’ credit scores. That’s it. No other supporting income, asset, or employment verification was needed.

Continue reading ‘Mortgage Financing For Self Employed Borrowers’ »

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During the Holiday Season many of us want to fulfill every wish of our family. Buying gifts to fill that special need is always fun but we don’t want to go overboard.

If you use all of your credit to enjoy your holiday then spend all of the next year trying to recover from your spending, then the habit has got to be broken. You are not getting anywhere by paying down your debt all year to just put yourself back in the hole. Can the habit be broken? Just like all “bad” habits you are going to have to commit to wanting to make a change. Once you have made a commitment to wanting to change then the rest is downhill.

The hardest part about making a change to your spending habit is knowing that you have a problem. If your problem is that you dig out the credit cards and just go crazy. Then you need to put your credit cards under lock and key. If you walk in and finance your purchases, then you need someone with strong will to help you say no. Otherwise stay out of those kinds of retailers until you learn to say no. Continue reading ‘Don’t Bury Yourself In Debt!’ »

If you’ve got a lot of debt, you may be thinking that bankruptcy is your only option. But, don’t file that bankruptcy petition just yet. These six steps may be all you need to stay out of bankruptcy and get your finances under control.

1. Write out all your monthly expenses, in detail.

Do you have a mortgage or an auto note? If so, what is your interest rate? How much are your monthly payments? What is the outstanding balance on those loans? List them, in full detail.

Next, write down all your necessary monthly expenses. These expenses include things like electricity, telephone, insurance, food, etc. You should know how much you spend each month on all of these items. Continue reading ‘Bankruptcy is Avoidable If You Do These Six Things Today’ »

The Bankruptcy Code gives homeowners facing foreclosure the right to cure the default any time up until the foreclosure sale process is completed. The key word here is “process,” and state law determines what the process is for a valid auction or sheriff sale. Until this has been completed, homeowners who file bankruptcy can use the federal laws for another chance to save their home and cure the default.

The Bankruptcy Code itself does not even determine when a house is considered “sold” for the purposes of a valid foreclosure sale. This means that state foreclosure laws will most likely be used in cases where borrowers attempt to pay off a loan through bankruptcy, even after a sheriff sale. Another aspect that works in favor of homeowners is that many states require an auction to be confirmed before it is valid. Continue reading ‘Using Bankruptcy to Cure a Mortgage Default’ »

With the recent financial collapse, the declining job market, and plummeting housing prices, many homeowners have had a hard time keeping up with their payments. Therefore, recently the topic of loan modification has become very hot. It’s hard to watch a television program without an advertisement or two about the topic of loan modification, but what exactly IS loan modification and can it truly help homeowners modify their current mortgage for a lower rate? This article will answer these questions and more.

In a nutshell, the broad term “Loan Modification” refers to the process of changing the terms of a homeowner’s mortgage. This will typically include a process whereby the loan is reinstated if it was in default, and/or the payment will be lowered to a level that the homeowner can afford. Obviously, this is a very hot topic with the current economic situation across the globe, and especially in the state of Florida.

This is a valuable practice for the lender as well, because when your loan is in default (you have been unable to make the payments), it’s very costly for the lender to foreclose on your home and resell it. Instead, it is often cheaper to simply work with the borrower to adjust payments until they are back on their feet. Continue reading ‘How Loan Modification Works’ »

Expectations are running high in the equity release market that home reversions plans could become a more popular choice in view of the current housing & economic climate.

It is common knowledge that in periods of low house price inflation, home reversions can become the favourable option as opposed to the roll-up lifetime mortgage.

The two comparable equity release schemes can experience different fortunes in such a static housing climate.

In summary, a home reversion scheme involves selling a percentage of the value of the property to the reversion company in exchange for a lease for life.

Therefore, in times of low house price growth the reversion company will not make as greater profit, as they will not benefit from the property value increasing.

In contrast, a roll-up lifetime mortgage in times of low house price inflation would suffer. Due to the nature of the plan & with the annual compounding of the interest, it would result in the ever increasing debt catching up with the property value quicker than if the house price was increasing. Continue reading ‘Are Home Reversion Schemes Turning Back the Years?’ »

Almost we all have some sort of debt that can be in various forms like a mortgage, a student loan, auto loan, or the balance of some credit cards. If you can pay off your debt, or even regularly take steps to pay your debt off, debt is not a bad thing to have. However, what makes money owing a real curse is too much amount of debt that often becomes the cause of unhealthy financial conditions.

If, you regularly determine the amount you have taken as debt, and try to find some ways to pay these arrears regularly instead of adopting the policy of take and see. Any debt, which you can afford to pay, is not too much debt, and if some liability gets beyond your reach to pay, it may become too much for you to pay. Continue reading ‘How Much Debt is Too Much Debt?’ »

Getting a second home mortgage is tough because if you really need the money they will not give it to you. You have to approach these home lenders that you really don’t need the money and they will give you the money. The rates for the second home mortgage are definitely higher than the first mortgage that you have. You need to shop around and find the best rates that suit your needs.

The banks are healthy now and they can lend money whoever they want too. President Obama has been given these banks a lot of money lately. The banks have been rebounded and can lend money to whoever they choose too. In some cases, this is beneficial to the consumer because they can now shop around for competitive rates. These competitive rates will be cheaper than you may suspect.

Using home-equity loans can help you drastically decrease in interest rates from many of these lenders. Many lenders will encourage you to take out more money than you actually need. Your line of credit with your primary residence can be very helpful to you when you’re trying to shop around for multiple equity loan offers. Home equity loans can float above a point or two above the primary rate. The mortgage interest rates which can be deductible up to $1 million of debt with your first and your second home loans combined can be very helpful to you when doing your taxes. Continue reading ‘Here Are Some Tips on How to Get a Second Home Mortgage.’ »