The Top 10 Reasons Why Your Mortgage Has Made You House Poor
1. Many people over the past 5 years who bought homes thought they were getting rich by buying bigger homes. Many were told that homes always went up in value and that they needed to get into the market as soon as possible before prices went up more. With history on your side, buying a home was the safe bet because they were going up in value across the U.S at an alarming rate. Little did the home buyer know, that they were about to become house poor.
2. House poor is a relatively new term. You never really heard any terms like negative amortization mortgage, option arm loans, or adjustable rate mortgage before the refi boom. They became common place during the refi boom and were supposed to be good home loans. Unfortunately they were some of the worst loans ever. Nothing can ever beat the 30 year fixed interest rate mortgage.
3. So
Click here to continue readingThe Top 10 Reasons Mortgage Companies Stopped Doing Second Mortgages
1. Mortgage companies starting around November 2007 stopped doing fixed second mortgages and home equity lines of credit (HELOC) due to changes going on in the mortgage industry. A lot of swift and sudden changes came to the type of companies that were farthest away from the actual money like the mortgage brokers, correspondent lenders, then the banks.
2. The banks are the one’s that set the guidelines for anybody who does business with them. Since a mortgage broker does not lend you the money (the bank does that the mortgage broker works with) they were told that they would not be honoring anymore fixed second mortgages or HELOC’s. This lead to a mad dash from all of the smaller companies to close these loans so they could sell them to the bank before the deadline or they would not be able to close.
3. What lead to this rush was a realization
Click here to continue readingThe Top 10 Reasons Why You Should Never Pay For A Credit Report
1. Paying for a credit report is something that a lot of people get told they need to do every six months or so. They go to a website that has the latest catchy jingle on the television and go there and buy a merged credit report from Equifax, Experian, and Trans Union.
2. The credit report is going to cost you probably $30 and you might even get told that you need to sign up for a credit watch thingy that costs you $25 a year or something. Stop wasting your money.
3. You already know what is on your credit report, or at least you should. What do you get bills for every month? Do you get a credit card bill? Yup, then it will be on there. Do you have a mortgage, car lease, boat loan, time share or any other monthly payments? Yes. Than guess what they will
Click here to continue readingThe Top 10 Reasons You Need To Pick The Right Second Mortgage
1. For those of you that do not know what a second mortgage is, it is a lien (loan) against a certain percentage of the equity of the home. What the mortgage company does is recognizes that you have a first mortgage on your home and they take the balance of that loan, get an appraisal on the home and say you have this amount of equity in the home. As an example, you have a first mortgage of $125k and the home is worth $200k, this gives you equity of $200k – $125k = $75k. Depending on what mortgage company you go with and what their guidelines are you could take out a second mortgage up to 100% of the value of the home.
2. During the real estate boom some lenders did second mortgages up to 125% of the value of the home because during that time the value of
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