Options to Stop Foreclosure

If you own a home in foreclosure proceedings or are steadily on your way there, you do have options before you. Although laws and regulations will vary between states, a few negotiating choices are fairly standard no matter where you live.

No lender in their right mind wants to foreclose on your property; this process is lengthy and very costly on their end, so they have every interest in keeping you in it. However, if you wait too long to initiate negotiations, your choices may be limited depending upon where you are in the process.

Ignoring the letters, notices and phone calls will not make the problem go away. The sooner you suck it up and actually talk to your lender and are completely honest with them, the better you and your family will be off.

Typically, there are five different options to help you avoid or stop foreclosure.

1. Forbearance Agreements: These will allow you and the lender to negotiate temporary adjustments to the terms of your mortgage or payments to make them more affordable for you. If you expect to regain your income within a short amount of time and know that your situation is not permanent, this is a great option. The lender will most likely either suspend your payments for a specified period of time, or lower your monthly payment to something you can afford in the meantime.

2. Loan Modification and Refinancing: Loan Modification will usually allow for an extension of your loan in order to lower monthly payments, or may result in lowering interest rates in order to do this.
Refinancing will actually require you to take out a loan with a new lender and get approved. This will pay off your current mortgage and extend the time you are paying off your home, but may be well worth it if you have a good credit score that will also qualify you for a lower interest rate. Remember you must do this before you get behind on your payments, as this will reflect negatively to the new lender.

3. Short Sale: A Short Sale happens when a bank agrees to release all claim to a property in exchange for less than what is actually owed on the home. Although this option will not allow you to keep your home, it will avoid foreclosure from tarnishing your good credit and allow you to get out from under the obligation of paying your lender for now.

This process will require prior approval from your lender, and you will need to retain the services of a real estate agent that can attest to falling home prices in the area. The agent will also be able to connect you to interested buyers in order to close the deal quickly.

4. Deed in Lieu of Foreclosure: This option should only be used as a last resort after attempting the first four on this list. If you choose to file for a Deed in Lieu of Foreclosure, you’re basically voluntarily saying you will leave the property and release all legal claims to it, in exchange for forgiveness of your defaulted mortgage. This will prevent foreclosure from being filed on your credit report and permanently affecting your score.

How Long Does Foreclosure Take?

The threat of losing your home to bank foreclosure can be very stressful, especially if you’ve fallen behind due to unforeseen and unavoidable circumstances. Losing a job or suffering from severe illness and injury can greatly impact your ability to stay current on your mortgage and other obligations, and you’re probably starting to feel some pressure from the collectors.

However, there is some good news. Foreclosure doesn’t happen overnight, as lenders are required to give you every opportunity to make good on your promises and become current on your loan. Every state and locale is different, and may allow anywhere from 30 to 300 days for a foreclosure auction to take place after filing an official Notice of Default. Make sure you are familiar with your state’s laws regarding these actions, and that your lender abides by them.

Redemption Periods are available in approximately half of the United States, which allows you to re-purchase your home for the foreclosure auction price. You could be afforded up to a year to use this concession, which is often more than long enough to find a new job and get back on your feet.

Contacting your lender as soon as possible after experiencing an event that directly affects your ability to pay them will far increase your chances for avoiding the foreclosure process. Payment arrangements may be made if your lender understands that your current situation is not due to you simply refusing to pay what you owe.

Other than individual state laws that can deviate somewhat from one another, the general foreclosure process goes something like this:

1. When you first miss a payment, usually due on the first of the month, this is considered the Date of Default.

2. Within a couple of weeks, you will most likely receive a letter and/or phone call from your lender, inquiring as to why you missed your payment. An option may be presented at this time by your lender to attempt to bring your loan current.

3. A Breach Letter will follow within a few weeks that will outline how and why the terms of your mortgage were violated or broken. Homeowners will then have 30 days from the date of this letter to bring the loan current, or risk facing home foreclosure.

4. Approximately 90 days after the Date of Default, your mortgage will be referred to a foreclosure department and local attorney who will file a legal and formal notice of foreclosure proceedings. Your mortgage default will now be a matter of public record, and most likely reported in the local newspaper.

When the process has reached this stage, it is far more difficult to reach a mutual agreement with your lender. However, foreclosure is imminent at this point, and it’s vital to take action to prevent being evicted from your home.

5. If you do not remedy the situation within a specified time period (this could be a week to a year, depending on your state’s laws regarding the matter), your home will be sold at a foreclosure auction, typically in a public arena.

Seriously in Debt? Bad Credit Home Loans Can Help

Credit card delinquencies all over the globe are at an all time high – a painful reminder of the economic recession that is gripping the whole world. People are defaulting on their payments in favor of more urgent cash needs – leaving a trail of bad credit. A bad credit history can be a virtual financial death sentence in conventional financial circles.

A bad credit history will disqualify you for other loans for as long as seven years. This is very painful especially when you are in dire need of cash for emergencies. Most people in this situation are forced to take the bait of loan sharks who offer credit at sky high interests and charges. However, the financial landscape is changing and many companies now offer bad credit home loans for people who will otherwise be disqualified from conventional loan programs.

There are many companies specializing in bad credit home loans. They are actually turning a difficult financial circumstance into a fruitful win-win situation. Bad credit home loans are high risk loans thus they require relatively higher interests than conventional loans. However, processing time is considerably lesser and there are not much documentation requirements to hurdle.

A bad credit loan is the perfect run-to during emergency situations when you cannot afford the hassles of credit history investigations. However, because of the higher interest rates involved, taking a bad credit loan should be seriously studied. If credit mismanagement is what has put you in a bad situation in the first place, you should think twice about committing to a new loan. You should seriously evaluate your capacity to pay and you should be armed with a personal finance plan that would guide you in your monetary decisions.

If you have decided that a bad credit loan is indeed suited to your needs and you are well prepared to manage it, you can start looking for reputable companies offering such types of loans. Browsing through top companies offering bad credit loans will give you a general idea of who are the best companies offering the most excellent service. Often, these companies offer similar packages but a closer look at their profile will eventually tell you which ones you would most prefer working with. Many of these websites also feature finance calculators to help you get a birds-eye view of how much you can take out on a bad credit loan and how much and for how long you will have to repay the loan.

When used for the right reasons and managed very well, a bad credit loan can save you from financial distress. Countless persons attest that getting a bad credit loan has helped them consolidate their debt and eventually pay-off all their balance. A well-managed loan will allow you to redeem your good credit rating and provide you with future financial leverage. As such, when getting a bad credit loan or making any other financial decision for that matter, always keep in mind the core values for financial success: discipline, responsibility, and good judgment.

Tips For Getting Your First Mortgage

If you are looking for a way to own a home of your own, you want to get a mortgage. You have many options when it comes to getting your first mortgage. You can get an FHA loan for first time home buyers, or you can also get a conventional mortgage loan. Mortgage loan rates have gone down as the government is trying to get people to buy homes. There is also a new tax credit for first time home buyers that you can take advantage of as well.

Before you get your home mortgage loan, you need to be aware of the responsibilities it will entail. In addition to paying your monthly mortgage payment, you will also have to pay real estate taxes as well as insurance on the home. These are usually included in with your mortgage rates.

Your mortgage interest rate will vary depending on your current credit rating as well as how much you are putting down on your home. You can use a mortgage calculator to figure out your principal and interest payments for your mortgage loan. You can find a mortgage calculator that will let you know your mortgage payments right online. This figure will not count the amount of real estate taxes or the homeowner insurance.

Your home loan lender will be able to give you a rate and help you figure out what type of mortgage loan is best for you. If you decide to go with an FHA loan, you can put as little as 5 percent down. If you get a conventional mortgage loan, you will need to put 20 percent of the value of the home down as a down payment. If you do not put 20 percent of the value of the home down for the home mortgage, you will have to get private mortgage insurance. Mortgage brokers can help you obtain this. Private mortgage insurance, or PMI, is usually paid for 7 years and protects the mortgage lenders in case you default.

If you do not make your mortgage payment on time, you will be in default of your mortgage and subject to foreclosure. Before you apply for a mortgage loan, you need to b sure that you are able to afford to make the mortgage payments. Take a look at mortgage calculators and see how much the mortgage payments will cost. If you are comfortable with the idea of making mortgage payments, then you can apply to a mortgage lender for a loan. Your mortgage lender will collect the information from you that you need, such as financial documents, do a credit check and will send your application to a mortgage processor so that it can be ready for an approval. Once you are approved, you will be able to close on the purchase of your home.

Anyone who is considering buying a home of their own, needs to understand what a mortgage loan entails and should apply for mortgage loans by looking at interest rates and finding a mortgage lender that can offer them the best competitive rate.

Tips For An FHA Home Loan

New homeowners have many incentives to get a mortgage loan. This includes attractive rates for first time home buyers, a tax rebate and the option to get an FHA loan. FHA mortgages are backed by the Federal Housing Authority and were developed as a way to help people move from renting to buying homes.

America was, at one time, a nation of renters. Getting a mortgage was difficult as the banks at one time required 50 percent down. Savings and Loan lenders began financing mortgages in the 1960s, but still required 20 percent down to buy a home. When you buy a home through the FHA lending program, you can put as little as 3 percent down. You can also save on various closing fees that are passed on to the seller when you buy a loan through this program.

Because the FHA mortgage is backed by the federal government, it requires a bit more paperwork and time than a conventional mortgage. For those who want to buy a home and get a lower rate as well as put less money down for the loan, the FHA mortgage is ideal. This program, however, is only available to first time home buyers. There is also a limit as to the amount of the home being purchased with the FHA loan. You can only use the FHA mortgage once.

In order to qualify for an FHA mortgage, the borrower has to have decent credit. They have to be working and be able to afford the mortgage payments, just as they would with a regular mortgage. There is also a matter of housing inspection that has to be performed by an FHA approved inspector.

Many sellers do not like selling to an FHA buyer because of the fees that the seller must incur in accordance with the FHA lending rules. These fees, such points and lender fees, are normally incurred by the buyer in the mortgage loan transaction. This can be remedied by the buyer paying for the fees outside of closing. This means that the buyer will issue a check to the seller for the amount of fees that are reflected paid by the seller on the closing statement, also known as the HUD 1.

If you are a first time home buyer and want to get a competitive mortgage interest rate as well as be able to buy a home with little money down towards the purchase, you should consider buying a house through the FHA lending program, you can talk to your mortgage broker about obtaining an FHA loan. If you are a first time home buyer, you should be eligible for the program.

Your mortgage broker will be able to help you find a lender that deals with FHA mortgages and that will be able to help you with this lending process. You will still have to provide the same amount of information for the FHA mortgage that you do for a conventional mortgage, but will usually have to sign more papers for this federal government backed home loan.

Getting A Bad Credit Home Equity Loan

If you have bad credit, you may think that you cannot get a home equity loan or borrow money for a home. This is not true. There are a number of lenders out there who are willing to make equity loans to those who have bad credit. The interest rate that you have to pay will be higher, but you can still get the money.

In order to get an equity loan for your home, you need to have equity in your home already. Equity is the amount of money that your home is worth less the amount that you already owe on your home. For example, if you have a home that is worth $200,000 and you owe $100,000 on the home, you have $100,000 in equity in your home. Most home equity lenders today will only loan you 80 percent of the amount of equity that you have in your home. In this scenario, you would be eligible for a home equity loan of $80,000.

Unlike a mortgage loan that can have a term of up to 30 years, a home equity loan usually has a much shorter term. You will most likely find a home equity loan that has a term of 5 years. In some cases, you can pay only the interest for the home equity loan during the term of the loan and then pay off the principal, which is the amount that you borrowed, back at the end of the term. Other home equity loans combine both the principal and the interest so that at the end of the term of the loan, the home equity loan is paid off.

You can get a home equity loan from a bank or even an online lender. As is the case with a mortgage, the lender will want proof of income, tax returns, bank statements and an appraisal of the home. The appraisal will let the lender know how much the home is worth. You will have to pay for the appraisal before the loan is made.

Once you get the home equity loan, you can use the money for whatever you want. You can elect to take the home equity loan in one lump sum and begin paying interest on it right away, or you can take it as a line of credit where you only pay interest on what you draw out. Either way, you can use the money that you gain from your home equity loan to make improvements to your house or pay off bills. The interest that you pay on a home equity loan is deductible on your income taxes.

If you have bad credit, you can still get home equity loans. Your interest rate will be a bit higher and you may have to pay higher fees. But you can still borrow some money against the equity of your home, even if your credit is less than perfect. You can apply for a bad credit home equity loan online, with your bank or with a mortgage lender.

What Is A VA Loan?

If you are a veteran of the armed forces of the United States, or the spouse of a veteran who was killed in action, you can apply for a VA loan. A VA loan gives veterans a chance to get a home mortgage for much less than the rate that is offered for a conventional loan. Like the FHA loan, a VA loan is backed by a branch of the federal government. In this case, it is backed by the Department of Veterans Affairs, a department that used to be called the Veterans Administration, hence the acronym.

The VA loan not only allows you to get a lower interest rate, but it allows you to put less money down for the home. A conventional mortgage requires 20 percent of the value of the home for a down payment. Some people who qualify for a VA loan can go with no money down mortgages, although most lenders will want at least 3 percent down on this type of loan.

Just like a conventional mortgage, a VA loan recipient must submit the proper paperwork to get the loan. This includes bank statements, verification of income or employment as well as tax returns. The lender will do a credit check, although the VA backed loans are more forgiving when it comes to credit scores than the conventional loans. You should still have decent credit if you are applying for a VA loan.

Any member of the service or former member of the service can apply for a VA loan. If your service was prior to 1980, you must have served at least 2 years in the armed forces. Those who served in the National Guard or reserve forces are also eligible to apply for a VA loan. Unlike the FHA loan, that can be used only once, the VA loan can be used 3 times for the veteran or spouse of the veteran.

In addition to saving money on the rate as well as requiring a lower down payment, the VA loan will also save the borrower on closing costs that are normally the responsibility of the buyer. However, because sellers are often hesitant about selling a home through the VA or FHA programs, because of the stringent government guidelines and fees that the seller has to incur, many costs are paid outside of closing for these loans. For example, since the seller is supposed to pay the closing fees for the buyer in a VA loan, these costs will reflect to the seller on the closing statement, but the buyer will cut a check to the seller to pay for the costs outside of closing.

Anyone who has served in the armed forces or is the widow or widower of someone who was killed in action while in the US armed forces should apply for a VA loan. Your mortgage lender will show you how you can get a VA mortgage loan. This is not a loan made by the Department of Veterans Affairs, but one that is made through a regular lender that is backed by this government agency. Most lenders will be able to make a VA home mortgage for a qualified applicant.

Personal Finance-Four Ways to Pay Off Debt

One problem that most people are having trouble facing is debt. People just owe so much money to their debtors and they do not know how to even repay it with all the expenses they have. Now, with the current financial crisis, the obligation is even harder to meet. But it is necessary that you sort out your personal finances before it’s too late. Below is a personal financial advice on the ways you can pay off your debt for a brighter financial future.

Tip # 1 Pay More than the Required Minimum Amount of Repayment
The best way to get rid of debt is to break the habit of paying only the minimum month after month. This does not do you any good. In fact, you are only prolonging the agony. But needless to say, that is exactly what financial institutions want you to do because the longer it takes you to repay your loan, the more interests they gain from the loan they gave you. And yes, you have the money to cover more than the minimum. Examine your spending habits closely and see where you can cut back in your household finances.

Tip # 2 Take a Loan against Your Life Insurance
If you have life insurance with cash value, a good personal financial advice to eliminate debt would be to borrow against it. In reality, you are borrowing your own money at significantly lower rates than when you do from banks. A good thing about this is that you can take your time when repaying the loan. Just make sure though that you do repay it so that your beneficiary will get the entire face value in case something happens to you.

Tip # 3 Borrow from Your Family and Friends
One way to improve your personal finances is to borrow money from your family and friends to pay for any outstanding debt you may have. Doing this will give you favorable interest rates and a tolerance for late payments. But if you want to maintain good relations, make sure that you keep everything in order by making a written agreement to keep both sides protected.

Tip # 4 Renegotiate with Your Creditors
This should be your last resort before filing for bankruptcy. You have to let your creditors know your situation, and try to renegotiate terms with them. If they aren’t amenable to this arrangement, inform them that you will be filing bankruptcy if all else fails. Ask for lower interest rates and longer repayment periods.

Follow these steps and become debt-free in no time. It can also help if you increase the amount of money you put into paying these debts by looking for a source of passive income. Be in control of your personal finance now and enjoy its benefits later.

Personal Finance Basics–Getting Help Out of Your Financial Rut

Many average Americans are now finding out that when it comes to financial literacy, we have a lot to learn. Many people have worked day in and day out, earning sizeable incomes only to lose it in unwise investments and bad financial decisions.

Personal financial management means taking control and responsibility of your own monetary decisions. Without the right information, mistakes are easily made. For example, many people often underestimate the accumulated interests and charges of loans and credit cards leading to ballooning debts. Personal finance books can help you take the first steps to ridding yourself of accumulated liabilities with expert advice on fending off debt.

A middle-income American household spends a great part of their budget on expenses such as tuition fees and medical needs. But, while these sorts of expenses are necessary and indispensable, there are several others that you can actually do without. Reputable personal finance books and resources can help you find where you can cut without sacrificing the quality of your home life and get the most out of your budget.

Saving for a nest-egg is also often neglected because the value of saving for the future is often underestimated. There are so many excuses for not saving especially when you have present needs that all seem urgent. However, it is possible to save even on a shoestring budget. Many personal finance books provide useful information about the best ways to save for future needs. They can also show you where best to invest and get the most return out of your hard-earned money. Most importantly, reputable self-help personal finance books provide needed motivation to get you started on planning for your future.

Personal finance may appear to be such a struggle now but the opportunities to improve will always be there. The key is to be armed with useful information to navigate your way out of the financial rut and start living a financially healthy life.

Pros and Cons of Becoming a Real Estate Professional

The life of a real estate agent or broker may be one that sounds like a great career choice to those who don’t understand their duties. True, it can be very emotionally and financially rewarding, but there are some stressful duties and hard work required to be successful in this business.

Setting your own hours, being outdoors and dealing with people on a daily basis sounds like a great deal, but real estate professionals are just like self-employed individuals or business owners: you have to hustle to make money, and no sales means no money in your pocket!

Real estate dealings are extremely complex, and a vast amount of knowledge is required to be involved in them on a daily basis. Legal requirements, disclosures, zoning, knowledge of the local market and negotiation skills all represent areas in which an agent must be well-informed and educated.

The life of an agent is extremely busy and may carry over into evening showings and weekend meetings, so if you like your time off from work, you probably shouldn’t work for yourself. Because sales makes the money in real estate, you are at the mercy of both buyers and sellers, with multiple deals either heading to or coming from a home loan lender; this means there is some knowledge required of the local banking community and how these mortgage loans are structured.

As an agent or broker, you must keep all sides to the transaction happy at all times – buyer, seller and lender – and be able to convince and negotiate with them on terms that may make or break the deal.

However, a real estate professional isn’t only involved at the start and finish of the deal. They are also responsible for preparing the property and staging it correctly in order to attract the ideal buyers in the area. Showings need to be attended and scheduled, and matching buyers with an ideal property are all part of the sales process.

You also need to be able to put out multiple fires along the way. Real estate is a sizable investment, and buyers and sellers alike can easily be upset if they feel the deal doesn’t happen how they feel it should. It’s vital for any agent to be able to console these customers and force them to move forward in order to keep the sales process moving.

Potential real estate professionals should also note and plan for slow periods in their business activities. There are definite downturns in the housing market at times, and very few if any sales may happen for several weeks while it’s still necessary to be constantly working on your sales activities.

Many agents, at least for the first few years, require a second part-time job in order to make ends meet. The median incomes for real estate agents range from $23,000 to $58,000, though some do make a great deal more. Consider your financial requirements, ability to acquire the necessary skills, and work environment carefully before choosing to join the real estate world’s forces.

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