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 You Better Buy A House With Your FHA Loan By October 2008
1. If you are thinking about buying a home soon you better be putting offers in very fast. On October 1, 2008 there will be new guidelines coming in to play that are administered by the Housing and Economic Recovery Act of 2008. This new housing bill is going to put a major squeeze on people looking to buy a home after that date so you better get a move on.
2. Under the new guidelines set forth by the FHA the minimum amount down payment will go up to 3.5%. It is currently at 3%. Not so much of a big deal but it does account for more money that you will have to come up with. On a $100k mortgage that is another $500 plus your closing costs.
3. FHA loan limits will decrease which will mean fewer people will be able to get approved on a jumbo loan. The current
Click here to continue readingThe Top 10 Reasons You Do Not Have To Wait To Refinance Your Mortgage After Buying A Home
1. First off there should only be one or two reasons why you would even want to refinance a home after closing on a home. The only time it makes sense to refinance in such a short time period after closing would be to take cash out of the home. Good luck doing it though. You will only be able to get approved on a new home loan is if the home was given to you in a will or a gift of equity (which is when a parent or relative gives you the house for 50% of what the value is).
2. Many parents will have paid off the house or owe little on it and decide to give the house to their kids to help them get started with their lives. Instead of charging the kids full price them give them a deal. Most will just sell them the house
Click here to continue readingThe Top 10 Reasons To Never Use A Credit Counseling Service
1. Credit counseling is an industry that has popped up because of a lack of one very simple thing, education. Its the thing that is not taught in our schools which is causing all of this financial crisis the country is jammed up in. All that a credit counselor really does is say to you to pay your bills on time. The best part is that you are going to pay them a fee to tell you to do that. Doesn’t that sound a bit backwards. You are getting bills from creditors telling you to pay your bills by a specific date, you can’t figure it out without hiring somebody to tell you how to do it.
2. Some of the other features credit counselors do is tell you what balances you need to be working on to get them paid down faster. You will usually be told to do something like
Click here to continue readingThe Top 10 Reasons Adjustable Rate Mortgages Will Have Higher Rates Than Fixed Rate Mortgages
1. During the refi boom of 2002-2007 adjustable rate mortgages always had lower interest rates than fixed rate mortgages. In most cases they were considerably lower. As an example you could get a 3 year ARM with an interest almost 2% lower than a 30 year fixed mortgage. This was the same case for the 5 year, and 7 year ARM’s too.
2. There was so much talk about adjustable rate mortgages being for only sub prime borrowers but in reality most of the people that took out an ARM had good credit. They either liked the sound of the lower interest rate, thought rates were going to come down on the 30 year fixed before it adjusted, or just listened to their mortgage broker tell them that they would refinance them in a couple years before their rate adjusts (of course they will, more revenue for them).
3. For some people
Click here to continue readingThe Top 10 Reasons The New Housing Bill And Issuing Covered Bonds Will Help The Mortgage Mess
1. Treasury Secretary Henry Paulson said today they are going to create a new “Covered Bond Market” to help with the mortgage mess going on in the U.S economy. By going to a covered bond market it really puts the weight on two financial institutions not just one to make sure the loan is good.
2. Under the new housing bill what would happen is a larger bank would invest money to a smaller local bank, credit union, mortgage lender, etc to do the loans and in turn they would put up some collateral to receive the money.
3. The collateral would be any asset that the bank has on their balance sheets. So if the homeowner defaults on their mortgage and is put into foreclosure the larger bank that invested the money could choose from something on the smaller banks asset sheet to make up for the lost income.
4. It really becomes a
Click here to continue readingThe Top 10 Reasons To Not Refinance Out Of Your Interest Only Mortgage
1. Interest only mortgages really get a bad rap when it comgees to talk about home loans. Many financial experts talk about how bad they are because you never gain any equity in the home because you are not paying down the balance. They are right in this conclusion because you are not required to pay down the balance during the interest only period of the mortgage.
2. What many financial experts or gurus do not tell you is that you have the choice to pay down the mortgage if you want. The mortgage company is not telling you that you have to for a certain period of time. Typically most interest only home loans are a normal 30 year fixed interest rate mortgage where the first ten years of the loan are an interest only option period and then at year ten it turns into a 20 year principal and interest loan where
Click here to continue readingThe Top 10 Reasons We Can Lower Oil Prices By Changing The Oil In Our Cars Every 5000 Miles
1. Oil prices are determined by a economic term called supply and demand. Right now in the world the demand for oil is higher than the supply. It’s not that the oil companies are not pumping the oil its that the people of Earth are consuming more than ever.
2. The rest of the world is trying to act like Americans and Americans are trying to act like them. Places like Russia, China, India, and Brazil are all buying cars of their own now and everybody is trying to get to the point where they own their own car instead of sharing the family vehicle like they use to. In the United States it is common to have every person in the house over the age of 16 to have their own car.
3. Oil companies are in business to make money. Don’t blame them for trying to do it. You are
Click here to continue readingThe Top 10 Reasons Foreclosures Will Keep Going Up Until 2010
1. CNN reported today that foreclosure filings are up 120% more in the second quarter of this year than what they were this time last year. It really should come at no surprise to anybody.
2. Right now a lot of people that took out adjustable rate mortgages from 2003-2005 are starting to see their interest rates finally adjust on them and are trying to deal with the increased payments. Many of these same people that took aout an adjustable rate mortgage also took a home equity line of credit when their property was increasing in value. They also took out their home equity loan right up to 100% of the value of the home more than likely to pay off credit card debt or other things they did not need. Now they have two loans combined and owe around 125% of what the home is worth.
3. Parts of the country like the
Click here to continue readingThe Top 10 Reasons Mortgage Companies Do Not Refinance Mobile Homes
1. A mobile home is also called a manufactured home. Both are the same in the eyes of the lender. It is considered a property that is not secured to the ground.
2. Without the mobile home being secured to the ground it becomes a huge risk for any mortgage company. The mortgage companies do home loans that are leveraged against a “secured property.” A mobile home or manufactured home is not.
3. Since the mobile or manufactured home is not secured to the ground the investors that give the money to the mortgage companies say in their guidelines that they will not allow them to write any loans on such a property.
4. If you own a mobile or manufactured home and are looking to refinance your property you should always be upfront about the type of property it is. Many mortgage companies will collect a deposit at the time of application
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