Why You Might Not Want to Refinance Your Mortgage (Yet) Forbes
The Fed recently announced that they intend to keep interest rates low at least until 2013. This means that if you’re one of the lucky few who still has decent credit and some equity in your home, you’re likely to have the opportunity for the next couple of years to refinance your mortgage and lock in interest rates that are near historical lows. But even if you can get a lower rate, it doesn’t necessarily mean you should.
We recently had a call to our financial helpline from someone who was wondering if he should refinance from a 4.875% rate to a 4.0% rate. At first, it looks like a no-brainer. After all, if you can refinance now and start paying less interest, why wouldn’t you?
First, with rates looking like they’ll stay low for a while, there’s no rush so you can use this extra time to get your credit in top shape before you refinance. That’s because the better your credit is, the lower a rate you’ll be able to qualify for and the more you can save over time. Start by ordering a free copy of your credit report from each of the 3 bureaus if you haven’t already done so in the last 12 months and correct any errors you find (70% of credit reports have them so there’s a good chance at least one of yours does too). You can also use a site like creditkarma.com or quizzle.com to get a free copy of your credit score and some suggestions on how you can improve it.
Refinance Home Mortgage Bad Credit
Nobody enjoys the idea of refinancing, even people with good credit, simply because it can end up being a horrible experience if something goes wrong along the way. So just imagine what people with bad credit must feel, or must go through, if they need to refinance. With the right information and some know-how, however, people can still get a bad credit home loan mortgage refinance.
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What would happen with my house if I stop paying the second mortgage which I can't afford?
I can only afford to pay my first mortgage and I can't refinance the loan because of the decreased home value and bad credit.
if the loan is secured on the property, then if you fail to make payments on any part of it the lender(s) can foreclose the loan and seize the property. in any event you will be liable for the any difference between the loan value, what you have paid, and what the proceedds from the sale of the property.
Since in order for the second lien holder to acquire title to the land the first loan must be paid, now if you homes equity will not even cover the fist loan, the second lien holder is in a tough spot
Depending on what foreclosure procedure the second mortgage holder use on you will determine if they will seek a deficiency judgment on you or not.
If the mortgage holder use the judicial foreclosure procedure then they could sue for a deficiency judgment. Under this procedure you would also be entitled to a redemption period ranging from 30 days to 3 years depending on the state laws in which you reside. Most lenders do not use this procedure.
If the mortgage holder use the non-judicial foreclosure procedure, then they normally would not go for a deficiency judgment, nor would you have a redemption period. Once the property is sold at the foreclosure auction then you will be required to leave the house by the new owner or your lender if the house fail to sell at the foreclosure auction.
You might check with your lender to see if they are able to work something out. You might request that they extend the amortization period thus reducing the monthly mortgage payments.
You might ask if they can make your second mortgage into a silent second mortgage for the next few years. This would eliminate you from making a monthly mortgage payment for a few years. Then you will be required to pay if off or start making the monthly payments once again.
The key point I am trying to make is that you should call your mortgage holder and see if there is a possibility that you can work something out with them.
They would rather do this as they do not want your house.
I hope this has been of some use to you, good luck.
"FIGHT ON"
Even if he does not recover his investment, he may do it just for the hell of it if he sees that you are not willing to repay the loan. All HIS expenses including attorneys and filing fees are tax deductible.
Better call them up to see what can be worked out.
Does yahoo watch for them and block them or something?
Are these scams too??
i asked about car title loan places and i get these, whats up for real w/ them?
Hello I am Mark Maxine by name, the (MD) of Mark loans venture i am a Reputable, Legitimate an accredited money Lender.I give out loans to Individual and companies in need of financial assistance.Do you have a bad credit or are you in need of money to pay bills? You can use this medium to solve all your problems as i render reliable beneficiary assistance and will be glad to offer you a loan at 3% interest rate. Services Rendered include: *Refinance *Home Improvement *Inventor Loans *Auto Loans *Debt Consolidation *Horse Loans *Line of Credit *Second Mortgage *Business Loans *Personal Loans *International Loans Please write back if interested. Upon Response, you'll be mailed a Loan application form to fill. (No social security and no credit check, 100% Guaranteed!) I Look forward permitting me to be of service to you. You reach us via e-mail:mark_maxine700@yahoo.com
7 hours ago
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by Frank Petti Member since:
August 13, 2008
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Hello,
I am Frank Petti by name, the C E O of Petti Micro finance, i am a Reputable, Legitimate & an accredited money Lender.I give out loans to individuals and companies in need of financial assistance.Do you have a bad credit or are you in need of money to pay bills?
You can use this medium to solve all your problems as i render reliable beneficiary assistance and will be glad to offer you a loan at 5% interest rate.
Services Rendered include:
*Refinance
*Home Improvement
*Inventor Loans
*Auto Loans
*Debt Consolidation
*House Loans
*Line of Credit
*Second Mortgage
*Business Loans
*Personal Loans
*International Loans
Please write back if interested.
Upon Response, you'll be mailed a Loan application form to fill.
(No social security and no credit check, 100% Guarantee!)
I Look forward permitting me to be of service to you.
You reach us via e-mail:info@pettimicrogroup.co.cc
office number, 00233-28-52-52-676,
(C E O) Tel-+233-24-82-40-801,
Fax-00233-217-134-43,
5 hours ago
17 minutes ago - 3 days left to answer.
Additional Details
1 second ago
thanks guys! i kinda figured but you know, desperate times....how sad they prey on down and out people!
It's called spam. They target you because you made a query about money, and accepted a cookie that identified you. Now you're on their list, and it costs a thousandth of a cent to send you a message, so if they receive .01% responses, they're ahead of the game.
I would never use the services of someone who spammed me.
You can get a free response address to report these messages to at spamcop.net
They search for the word "loan" in the question and they cut and paste their response.
Three things to watch for:
1) If they respond to a posting on a message board, they are a scammer.
2) If they are using a web-based email address (Yahoo!, gmail, Hotmail, etc.) they are a scammer.
3) If they "approve" you for a loan but require you to pay them money first, they are a scammer.
Yahoo! eventually deletes the account but they always can create a new one in a few seconds.
For example: If imascammer14@yahoo.com gets deleted, they just create imascammer15@yahoo.com.
are these scams too??
i asked about car title loan places and i get these, whats up for real w/ them?
Hello I am Mark Maxine by name, the (MD) of Mark loans venture i am a Reputable, Legitimate an accredited money Lender.I give out loans to Individual and companies in need of financial assistance.Do you have a bad credit or are you in need of money to pay bills? You can use this medium to solve all your problems as i render reliable beneficiary assistance and will be glad to offer you a loan at 3% interest rate. Services Rendered include: *Refinance *Home Improvement *Inventor Loans *Auto Loans *Debt Consolidation *Horse Loans *Line of Credit *Second Mortgage *Business Loans *Personal Loans *International Loans Please write back if interested. Upon Response, you'll be mailed a Loan application form to fill. (No social security and no credit check, 100% Guaranteed!) I Look forward permitting me to be of service to you. You reach us via e-mail:mark_maxine700@yahoo.com
7 hours ago
Choose as Best Answer
0 Rating: Good Answer 0 Rating: Bad Answer Report Abuse
by Frank Petti Member since:
August 13, 2008
Total points:
137 (Level 1)
Add to My Contacts
Block User
Hello,
I am Frank Petti by name, the C E O of Petti Micro finance, i am a Reputable, Legitimate & an accredited money Lender.I give out loans to individuals and companies in need of financial assistance.Do you have a bad credit or are you in need of money to pay bills?
You can use this medium to solve all your problems as i render reliable beneficiary assistance and will be glad to offer you a loan at 5% interest rate.
Services Rendered include:
*Refinance
*Home Improvement
*Inventor Loans
*Auto Loans
*Debt Consolidation
*House Loans
*Line of Credit
*Second Mortgage
*Business Loans
*Personal Loans
*International Loans
Please write back if interested.
Upon Response, you'll be mailed a Loan application form to fill.
(No social security and no credit check, 100% Guarantee!)
I Look forward permitting me to be of service to you.
You reach us via e-mail:info@pettimicrogroup.co.cc
office number, 00233-28-52-52-676,
(C E O) Tel-+233-24-82-40-801,
Fax-00233-217-134-43,
5 hours ago
thanks guys! i kinda figured but you know, desperate times....how sad they prey on down and out people!
Yes...all are scams. Here are some red flags:
1. Lenders do not have private e-mail addresses such as yahoo or msn.
2. Frank Petti's profile states he's been a member since 8/08.
3. All 3 offers are almost carbon copies of each other. These scammers have no imagination, but if it ain't broke don't fix it.
4. Lenders rarely ever lend outside their country.
5. All are offering rates without looking at your credit history.
6. The rates are too good to be true
Cut and paste each one and place on Scamomatic.com. This site will give you a message in less than 1 minute regarding wether e-mail is a scam or not. You will also need to cut and paste e-mail address and the site will also let you know if the party is a known scammer.
Good luck
Mortgage Dilemma?
Mortgage Dilemma
We are in Chapter 13, really bad credit but both husband and wife make 6 digits each.
Just a little background how we got the bad credit, we use to have a business that went sour and now we just decided to work and makes 6 digits each of us. Now here our dilemma.
We have a two mortgage the first interest is 6.25% and the other one is 11.25%.
We live in the house that is worth $700K here in Maryland. We are paying for the first mortgage $3,100 and $2,300 for the second mortgage and $1,200 for the Chapter 13 so total of $6,600/month for mortgage. Since we are in Chapter 13, it makes it impossible to refinance. We have tried www.naca.com but according to them that we cannot be in Chapter 13. We also have tried other refinance company but unfortunately our house when we purchase it is was $699K and 3 years ago since the market is down the value of the house is the same there is no equity and therefore we cannot refinance. So just to summarize why we cannot refi
Since you each make six figures per year, or at least $200,000 total, and your total payments are $6,600 per month, that is only $78,200 per year, leaving you $120,800 per year ($10,066.67 per month) for all your other taxes and other expenses, you should be fine.
I wish I had your problems!
If that is what you are asking - Most places require you to be out of bankruptcy for 2 years.
As for the value of your home - many people are facing the same problem when trying to refi their homes from a arm or interest only to a fixed rate.
First off, I'd like to mention that there are refinancing opportunities for homeowners who are currently in a Chapter 13. Qualified applicants can qualify for up to 95% of the home's current value. Some basic requirements are that you must be in chapter 13 for at least 12 months, you maintain a perfect payment history in both your mortgage and your bankruptcy during that period, and you must have sufficient equity to not only pay off your existing mortgage, but buy out of your bankruptcy as well (In rare cases, a trustee may approve refinancing while leaving your BK open, but it's highly unlikely).
That said, based on what you've stated here, you may not qualify at this time; however, if you're serious enough about refinancing, it doesn't hurt to make sure. You should either contact a local real estate agent to get an approximation of what your house is worth, or, for a better reading, order an appraisal on your home (usually priced between $250-$350). In the meatime, keep making your payments on time, and hope (like the rest of us) the real estate markets improves sooner rather than later.
my mother in law can't afford to pay her house note and her credit is bad, what are her options?
She has four children who are willing to help but we feel she is getting ripped off by the mortgage company. My husband would like to buy the property to get a lower interest rate but we can't afford a second house note. Can we refinance her home without purchasing it? Can we purchase the home and have some legal back-up that she (or her other children) will be responsible for paying the loan?
Yes, she does have a high rate mortgage and was stupid for signing whatever her now deceased husband put in front of her.
I do feel the mortgage companies take advantage of people's ignorance. They have offered to lower her payments but she would be paying interest only.
First, how is she getting ripped off by the mortgage company NOW? Did she have anyone review the loan papers before she signed?
If you can't afford to buy it, then that's a moot point.
So, you have 2 choices from what I can see in your question
Get the 4 children together to co-sign for the loan and everyone pay's momma's mortgage payment until she passes. You will equally share in the tax liability too, and also the tax advantages, being able to write off the interest and real estate taxes.
OR
Wait for the foreclosure and decide who momma's gonna live with each quarter, sell her furniture and lose whatever assets she was going to leave you upon her death.
You get to choose..
I wish you good luck.
If that is not an option, then she could refin it in her name OR each kid help her make the payments.
If she can't afford it and if the kids can't help, it really isn't doing her any good to keep it.
And for the record, I'm guessing she isn't being ripped off by the mortgage company. She has a rate that is to high for her to pay, but was given to her and SHE accepted. Don't blame the lender.
Either all children get a mortgage and buy the home from her or pay her note. Maybe she can live with one of her kids and rent the house out so the rent will help with the mortgage or sell it.
How do I get out of a joint mortgage with my mother?
When my parents had to refinance their home they used my name because my father had bad credit. My mother and I are now in the mortgage together and my father is out of the picture. My mother and i can no longer afford the house unless she gets a second job or lowers her expenses. I have taken out extra school loans to pay for the expenses and she doesn't help out much. Is there any way to get out of the mortgage? She is not being responsible and I don't want my credit to get messed up. The more I take out extra loans, the more she spends....you get the point. Can I sell my share to her? how do i do that?
Hi Refinanced the house before starting med school to help pay bills. Can I sell my share to my mother? There is not a lot of equity on the house.
the only way to get off the loan is to either sell the property or refinance.
you are beside a rock and hard spot. [and maybe committing
a bad bad by using $ for school on a mortgage]
frankly you can cure this but you might need [no atty needed]
a court action.
I am guessing that your house's equity is less than its
mortgage.
if you DO have lots of equity, selling your house
for a discount is easier than buying bread.
if you don't--you can do one of many things;
a; MAKE sure you are on the deed; it is illogical to be
on the mortgage and not the deed; that will take
court action.
b; sell the house..to someone else..or
c; seek out a trader and trade the house.
[it is not likely your mom would want to move to the
other place where the traded for house is]
d; sue your mom for her part of the mortgage payments
e; seek a short sale with condition that your credit
will not be affected.
f; and last but not least--
seek a court appointed psychiatric evaluation of her.
seriously!
I am looking for a Investor Loan?
I am facing foreclosure and need a refinance. I am capable of repaying back my mortgage but the problem is that i owe $250K and my home is only worth $219K right now and my credit is too bad to refinance. Other than my home i have never been late on anything else in my life!!! I have a 10% on my first and a12% on my second totaling $250K. I need a loan fast and am willing to accept any offers out there! FYI I have NO equity right now and a 450 FICO Score!
tHEY are willing to give me the re-pay option but they want 6k down on the first and 4k down on the second and the interest rate stays at 10 on the first and 12 on the second!
The question is how far into the foreclosure are you. Have you contacted the mortgage companies and inquired about having the payments you are behind added on to the back end of the loan. Most companies are willing to work with you they do not want to foreclose on a property then they have the hassle of trying to unload a property and they are in the finance business not the real estate business and 9 times out of 10 they may not recoup all cost for the loan and the cost of unloading the house. Especially in today's market with the amount of sub-prime loans going into foreclosure and lenders going belly up most lenders will work with you.
Although most people do not want to call their mortgage companies especially when they are behind because they are embarrassed and do not want to confronted by the customer service department about why they are not paying.
But if one phone call could alleviate the stress your feeling it would be worth the few minutes the call would take. What is the worst that could happen they could say that they do not do this and you would be no worse off then you are now.
Good luck
You can contact them with their email,richards_loan_agency@yahoo.com
Wanted to help my friend in getting mortgage loan for $240k by adding my name as co applicant. My concerns..?
I trust my friend. I wanted to help him by adding my name as co applicant since my friend has bad credit score and I have good credit score. The advantages for him: 1) he will get lower interest 2) he need not pay property insurance. The insurance is waived off if credit score is good or 20% down payment. He is making 5% as down payment.
1)I have plan to buy home for myself but I am entitled to get loan for only $250k.
a) If I add my name as co applicant in my friends loan, will I have problem in securing loan for my home since I am already in 250k loan.
b) I heard there is tax rebate for the first mortage loan and subsequent mortage loan is treated as investment property. And the second loan wont qualify for tax rebate. Is this true?
c) what if my friend refinances his loan in 6 months and then I apply my mortgage loan. Will I have any problem in getting my loan and my tax rebate(technically this is my 2nd mortgage loan).
To answer your questions.
A. Yes because of the debt incurred on the first mortgage you would have to budget for both payments.
B. Yes it's true.
C. Because it will be the second mortgage you will not qualify for the rebate.
I know you did not ask for opinions but to put it simply, this is a seriously bad idea on several levels.
Can I be forced to sell my home?
Ok I'll try to make this as short as possible (if it's even possible)...
We have a first and a second mortgage on our home. I had developed somewhat of a friendship (via phone) with our broker over the years. He had done a 2 or 3 loans for me prior to the one's I currently have. When we went into doing a good size remodel he did a 30 year fixed mortgage loan that was killing me financially during construction. So, during the end of construction May 05' we refinanced into a Negative AM Loan and due to needing more $ to finish our project we took out a second in the amount of $25,000 ($20,0000 was what our contractor told us we needed for completion). The plan was that a Negative AM would give us a little extra cash if we needed it for the finishing touches. With this loan I could choose month to month to either make a Neg AM minimum payment, interest only payment, 30 year fixed or 15 year fixed payment. After a year we would refinance the 1st and 2nd into 1.
Well, I had called our broker 3-4 times in the months following the signing of papers concerning when the payment for the 2nd was due and for how much. 1st contact was about 1 month after completion of the loan to let him know I hadn't recieved a statement for the 2nd. He said it was on his desk and he hadn't gotten to it but will soon. I called at least 3 more times over the next few months and was told the same thing during the 2nd and 3rd contact. Then by the 4th contact he said don't worry about it just appreciate it now. I thought ok I guess we'll just deal with it later (yes, I know that sounds stupid and why would someone do that right?) I didn't really think much of it because like I said we had developed somewhat of a friendship over the years. (And NO not sexual, I have never met the man in person and I am MARRIED)
A year came and went, then a year and a half came. I called him sometime in January or February 07' to asked him when we were going to refinance the loans. He said let's do it. I started the process of submitting all the paperwork and he ordered an appraisal which we paid for out of our pocket. The result was that we had plenty of equity to qualify but due to our credit scores at the time (which weren't to bad but not great) he advised us to wait because the interest rates were continuing to drop and he was confident that we could get a better interest rate if we were to wait a little longer. We both agreed.
Another year went by. In January 08' I called him again to start the process of refinancing. Again, I submitted the paperwork and paid for another apprasial. I shared my concern with him regarding the news of foreclosures and it making it harder for me to get refinanced. I let him know I didn't want to lose my home. He understood my concern but was still confident and advised me not to worry. He wanted us to somehow cut our credit card debt down by 50%. He suggested to borrow money from our family or friends. Well, needless to say that was not possible. I don't have any rich family members or friends that would let me borrow 6 or $7,000. This was so I could manipulate the balance of my close to being maxed out credit cards. So, that's how we left it. I was to try and get my credit cards down. That was in March. I called him and July to let him know I wanted to get it done. He asked me to call him back next week. I agreed but didn't. Not on purpose, but at my job, the summer is crazy.
Coincidentally, while our economy is going down the crapper, I recieved a phone call from him a couple of days ago letting me know we needed to come up with some kind of plan, he said I needed to come up with atleast $15,000 in 30 days!!!! If I do that he will wait on the rest so I can continue to pay down my debts and refinance me later. He told me if I didn't, we would have to sell our house because, at this time I still have enough equity to pay him off.
So, after this long story my question is... can he force us to sell our home? I have been loyal in paying my 1st on time without default. I don't have a problem paying him back, I did borrow the money. It's not like I've ignored the 2nd completely either. I have looked through my paperwork and it doesn't have any payment address or who to make the payment out to. Can he just all of a sudden demand this money to be paid to him? Can he force my family out on the streets? For a $25,000 debt I had inquired about a number of times and a first that has no default against it.
Probably not. I would ask a Real Estate attorney to be certain though ~
More homeowner woes in Southern California...
I own a home that was refinanced a few years ago. I also have a second mortgage. Both are 30 year fixed mortgages. The second was taken out to buy out my ex as part of a divorce settlement.
My company just layed off several people. I make a very good living, but I am very concerned that another round of layoffs is coming, and that I might be a casualty. In fact, my industry in general is hurting right now, and getting a job with similar compensation would be difficult.
As for the note on the property, I owe $530K (includes a second mortgage of $135K), on a house that is probably worth $425K (at best) right now.
If I do lose my job and can't get another, (which pays enough to allow me to afford the mortgages), in a reasonable period of time, does it make sense to drain my savings for a house that is losing value? Then what? I will be broke and jobless (or under-employed). It seems that I would lose the house anyway...but walk away with nothing in the bank if I try to hold on to the bitter end.
I don't have the same issues as sub-prime borrowers, but I am being impacted by the bad economy AND all the foreclosures driving home values into the toilet.
Do I want to invest $48K per year (one year's worth of payments) for a house that is losing value? If it took 5 years for housing to recover, that's nearly a quarter of a million dollars spent...for what? To just "break even"? Is that a smart plan? Tax advantages will be moot if I am not working.
Is it worse to dump every last penny into a house that is depreciating? Is that smarter (and more economical) than getting killed on my credit?
In summary, if I do lose my job, my thought is to immediately bail out of the house (unless my creditors are willing to go the extra mile to help me). I see no value in taking the moral ‘high road’ as I lose everything.
I do believe in living up to my obligations. But I also believe that common sense has its place too.
I would love some advice.
This scenario only applies IF I lose my job.
Hey 'vb', you missed my point completely...but thanks anyway.
If you lose your job, this counts as a hardship for a short sale, which may be an attractive option for you.
A short sale is where you come to an agreement with the bank for them to take whatever you can get for the house to pay off the debts. This is a better option than a foreclosure for a couple of reasons: First, it's less of a negative hit on your credit report. It shows that you took some responsibility to work out a solution rather than just walking away (foreclosure). Second, a bank can go after other assets with a foreclosure to get their money back. This may include hiring a collections agency, who will hound and pester you forever. With a short sale, the debt is just forgiven.
One requirement for a short sale is to submit a hardship package to the bank (the loss of a job is one such hardship - and "I owe more on the house than it's worth" is not a hardship). The bank then instructs you to sell the house for whatever you can get for it. The listing will include a disclaimer saying something like "Offers accepted pending lender approval." When an offer comes in, the bank will then negotiate with all other lienholders (other mortgage holders on the property) to deetermine who gets how much if the property sells for that offered price.
If all lienholders can come to agreement, the bank instructs you to accept the offer. The transaction then proceeds like any other real estate sale. The only difference is that the bank may instruct you to pay all of your closing costs (like property taxes owed, real estate commissions, etc.). If the lienholders can't come to an agreement, then the bank will instruct you to reject the offer and list the property for a higher price.
Some banks require you to go into default before agreeing to a short sale. In this case, you stop making payments and they issue a notice of default that stipulates that the property will go up for foreclosure auction about 3-1/2 months after the notice of default is issued. This basically forces you to go through with the short sale in an expeditious manner, with the threat of foreclosure looming over your head. And, I read in the paper this weekend that only 20% of short sales go through. The rest become foreclosures.