How High is Your Mortgage Payment

Written by Rasheedat Oduola on . Posted in Home Buyers and Mortgagors, Mortgage Economy and Market

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Are you paying through your nose for your mortgage on a monthly basis? For most individuals mortgage is usually the highest expense on their list every month but how do you know if you are paying appropriately on your mortgage.

As a homeowner your interest rate should not exceed 4%. If it exceeds that percentage you might want to refinance that mortgage as interest rates have been lowered to 4%. This will ensure you save some money monthly on your mortgage. Do a research on the different lenders and compare their mortgage offers to determine which would be an appropriate fit for you.

For homeowners with an adjustable rate mortgage that has just been set to a higher rate, this new rate might be eating deep into your finances and budget. It might be advisable to switch to a fixed mortgage payment over a long term. This long term could be from 30yrs. This could help reduce your mortgage rates and thus having a lower monthly rate. You might want to involve the expertise of loan officers to advise the best option.

The amount of time you have to pay off your mortgage is also a very important factor as mortgage costs are not just about your monthly payments. If your income has recently increased you might want to talk to your lender about refinancing your loan to a shorter period as this will ensure you pay off your mortgage earlier than what your initial due date .Your lender refinances your loan from the long term fixed rate to a shorter term fixed rate. This could also help reduce the rate on your loan over the remaining period of payment.

You might want to talk to you lender or appropriate loan officer to know which one best applies to you .These tips at the end of the day irrespective of whichever applies to you should help you save perhaps thousands of dollars on your mortgage payments.

What You Need To Know About Mortgage Fraud

Written by Rasheedat Oduola on . Posted in Home Buyers and Mortgagors, Mortgage Services and Providers

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Mortgage fraud is a type of fraud committed by borrowers and professionals within the mortgage industry and it is usually committed for either profit or housing purpose. Mortgage fraud can be said to have been committed on a property when there is a misrepresentation, deception or omission with regards to the property to in order to insure a loan.

Professionals within the mortgage industry sometimes deliberately withhold or don’t give full information about their clients credit/debit, employment status, condition and value of their property in other to secure a loan for them and maximize profits on loan transactions. These details are intentionally omitted by the loan officer, title company, insurance agent, real estate agent, mortgage broker or appraiser with the aim of maximizing profits on that loan transaction and gaining extra sales commission.

Borrowers are also culpable in committing this fraud and it is done with the help of officers that are processing their loans. The main reason borrowers partake in this is to obtain or maintain real estate ownership. They omit the details of their income, credit/debit status with the knowledge of their loan officers.

The two most common fraud scams within the industry are the air loan and appraisal fraud . Loans sometimes can be obtained on a nonexistent property for a nonexistent borrower, this is called air loan. Professionals within the industry combine efforts to create a ‘ghost borrower’, nonexistent property and title on such property, fake employment verifications, phone numbers, mailboxes etc. All these are done in other to make everything appear legitimate. This fraud just puts cash in the hands of the scammers without selling or buying any property.

Appraisal fraud on the other hand is also perpetrated by the industry professionals such as the real estate agent, loan officer and loan officer joining forces to maximize a purchase price and loan amount in order to increase commission.

Government agencies are stepping up to combat mortgage fraud in all its ramifications by monitoring the real estate industry/market. Professionals within the industry are required to be properly licensed and improve their skills. In addition, the activities of companies within this industry is being monitored and audited on a regular basis to ensure adherence to guidelines and best practices.

In general the industry is being properly regulated with the hope of totally eradicating the fraud within the industry.

Mortgages to reduce closing costs

Written by Lynn Nunez on . Posted in Home Buyers and Mortgagors, Mortgage Economy and Market

As reported by the mortgage professor, he proposed that mortgage lenders simply remove all of the third party settlement costs and instead bundle all of those fees required by the lender. When acquiring a mortgage have you noticed all of those fees and services not disclosed but required to be paid by you listed on your settlement sheet? These fees are required by the lender as a condition for granting you the home mortgage, why not they pay for it?

You’re wondering what difference bundling the fees will make. They will only charge you the total fee anyways.

Yes, you’re right but as these services, such as the title insurance that protects the lender, the mortgage insurance that again protects the lender, appraisal that assesses the value of the home, and all the other services needed and which you are referred to or have no control over where it gets done. In turn the lender is not only making you pay for it but profiting from it as well by receiving free or underpriced services.

They can purchase these services in bulk and get a much lower rate that can then be passed on to us in one flat rate. By having the lender charge the mortgagee a flat fee it will substantially lower the inflated prices they now pay the third party providers. Lenders will be competing for our business by offering a good flat rate on closing costs and quality, rather than itemizing the fees, some that are not even used or needed. In 2002, HUD tried to implement the package approach with a single price, but as it was voluntary the mortgage bankers were not on board. Notary Public tools

Now with the debut of a 15-year mortgage gear towards low to moderate income households with no down payment the flat fee closing costs sounds more appealing.

Moving Tips

Written by Shardae Griffin on . Posted in General, Home Buyers and Mortgagors

moving-tipsIf you are one of thousands of people who have moved their family to a new home or community, you probably have fresh memories of  some of the ups and downs, thrills or frustrations of moving. One of the best moving tips you’ll ever hear is that good packing is essential for a stress-free move.  If you choose to do some or all of your own packing, it is important that you familiarize yourself with packing techniques. Also moving boxes that will best protect your possessions are a big help. It may be convenient to make a list. Before packing one box, create a simple record keeping system. Place a number on every box you pack and list the contents on your list. When describing the box contents, be specific. For example, ” A-D files” is better than just writing “files” It may not hurt to color coordinate as well. Designate a color for each room in the new home, such as yellow for kitchen, orange for dining room, etc. Place colored stickers on the box near the box number. Inside your new home, place a matching sticker on the door to each room. If you have hired movers, they will know where to put everything once they arrive to the new destination.  It’s also helpful to post a sign on the wall where you may want boxes stacked to keep out of furniture and traffic areas. Try to keep things together when you or the movers are packing boxes. Keep bookends with books, light bulbs with lamps, and extension cords with appliances. Small, loose parts can be attached to the item they belong to with tape or placed in small envelopes. Larger corresponding items such as a cable TV cord can be placed in a resealable bag and then taped to the underside or back of the item.

Home Buying. Good or Bad Investment?

Written by Shardae Griffin on . Posted in General, Home Buyers and Mortgagors, Mortgage Economy and Market

homes1Most people seem to think that owning a house is a great investment. Thornburg investments says houses return a barely positive return on a real, return basis, but as they note, all of the fees are not actually included in this calculation.  If you consider a house as two distinctly different pieces, you have the land that you own and the actual house itself.  The land is what some would call an ” investment” since it’s highly probable the land itself will appreciate in value over time. The house itself, however, is a depreciating asset that is guaranteed to fall apart just like your car will. Like all financial asset purchases you are guaranteed to stat your purchase in the red by the amount of fees involved in purchasing the asset. Homes are an unusual financial asset in that they are extraordinarily expensive from an up-front cost perspective. You have Realtor commissions, closing costs, inspections, appraisal, insurance and a whole slew of other potential costs such as moving or maintenance. This is before you have even stepped foot into your “investment” and of course before you have started paying the real fees such as mortgage. Over the life of a home you will have to pay taxes, mortgage payments, property insurance, utilities, water, disposal and routine maintenance. These are all fixed costs and whether you rent or buy you will have to pay some of these fees no matter what. Throwing out utilities, water and disposal with the assumption that your rental option has these costs embedded you will still have to pay mortgage, taxes, property insurance and you will have to maintain the property yourself if you own your home. None of this means that buying a house is a bad idea. It is simply intended to put the total costs and real, real returns in the right perspective for those who buy a home with a mortgage and live in that home.

House Flipping

Written by Shardae Griffin on . Posted in General, Home Buyers and Mortgagors

house-flipping-conceptSo much in house-flipping depends on the real-estate  market.  During a boom, flippers have the upper hand and can almost name their price in some areas. However, while in a slow period, many of these homes can sit for months. A lot of decisions are to be made from the very beginning. Once you know where you want to buy then your next decision is on what type of property you want to purchase. Deciding on a fixer-upper involves committing to improving that home, which takes time and money. If you purchase a foreclosed home you could get a bargain on an under priced house but keep in mind that if the previous owners could not pay the mortgage they most likely couldn’t afford to upkeep the house. You would then have to worry about problems such as a leaky roof or a dead or overgrown yard  These two types of properties are what most people think of when flipping comes to mind. One of the first piece of advice that most flipping experts give is to make a budget. While finding the perfect place and knowing your skill set is important, budgeting is where new flippers most often fail. So the first place to start is to get financing.  When financing it is very helpful to know that the larger down payment that you are able to pay, the lower the interest rate. It does not hurt to save cash for fixing up. Make sure that you research on what type of neighborhood you intend to do your house flip. Really investigate the area by driving around during the day and at night. Check recent sale prices and find out of any other flippers are sitting on empty houses.  Keep in mind that some markets are more profitable than others, such as: Great school systems, low crime rates, city improvements, including street repaving, new street lights and street signs.

Fair Housing

Written by Shardae Griffin on . Posted in Home Buyers and Mortgagors

fair-housing-poster-winner-The primary purpose of the Fair Housing Law is to protect the buyer/renter of a dwelling from seller/landlord discrimination. It’s primary prohibition makes it unlawful to refuse to sell, rent to, or negotiate with any person because of that person’s inclusion in a protected class.  The Fair Housing Act covers most housing. It exempts in some circumstances owner-occupied buildings with no more than 4 units, single-family housing sold or rented without the use of a broker and housing operated by organizations and private clubs that limit occupancy to members. If you think  that your rights have been violated, you are able to file a complaint by completing the Housing Discrimination Complaint Form. This form is available to you to download. You may also write HUD a letter, or telephone the HUD office nearest you. You have one year after an alleged violation to file a complaint with HUD, but you should file as soon as possible.  When completing the complaint form you should include your name and address, the name of the person your complaint is against, the address or other identification to the housing involved, a short description to the alleged violation and the dates to the alleged violation. Once your complaint is received, the alleged violator of your complaint will be notified and given the opportunity to respond. An investigation will be done to determine whether there is reasonable cause to believe the Fair Housing Act has been violated. An agreement with the person your complaint is against will be first attempted. A conciliation agreement must protect both you and the public interest.  If an agreement is signed then HUD will not take further action on your complaint. If  there happens to be a reasonable cause to believe that a conciliation agreement has been breached then it will be recommended that the Attorney general file a law suit.

How to choose an Appraiser

Written by Lynn Nunez on . Posted in Home Buyers and Mortgagors, Mortgage Economy and Market, Mortgage Services and Providers

houses_and_dollar_signThis all-important step in getting the financing you need is the home appraisal — an oftentimes-confusing part of the mortgage process in which both buyer and seller must depend on the expert opinion of a stranger. A common misunderstanding is that the appraisal amount is only for the house itself. In fact, the figure appraises the total value of the home and any other permanent structures, along with the land that the house is built on. This appraisal figure also determines the loan amount you can get to buy the property.

A qualified appraiser has formal education in appraisal theory, principles, procedures, ethics and law. The appraiser should be up to date on the latest appraisal standards. Continuing education and testing are the only ways to ensure this competence. The appraiser you hire should be familiar with the type of property you want appraised and know how to value it correctly. There are many self-acclaimed personal property appraisers who have not completed any professional education. It is important to ask the prospective appraiser what type of formal appraisal education training he or she has received.

Do not hire an appraiser who charges a percentage of the appraised value, or charges a “contingency” fee. These practices are clearly conflicts of interests, and may result in biased values. Hourly fees, flat rates or per item charges are acceptable. It is a good business practice to have a contract stating in writing the expectations of both parties.

A home appraisal is not the same thing as an inspection. If you’re buying a home, you’ll want to hire an experienced home inspector to point out any potential problems that could turn into costly nightmares in the future. Property appraisers will likely make note of any obvious issues, but they won’t test your heat and air, check the chimney, or determine if your plumbing is up to code. That’s the job of the inspector.

Real Estate Websites

Written by Christina Green on . Posted in Home Buyers and Mortgagors, Mortgage Services and Providers

Websites2Local Real Estate websites are better than national ones. National Real Estate websites do not always have accurate information.

They use it as a free ad platform to get people’s attention and for free web traffic. National websites are an open platform, without regulation. The major problem is that homebuyers do not know whether a listing on them is a legitimate deal or a scam. Innocent online home shoppers will simply assume that a property for sale, and may begin to get attached to it before finding out that it is a scam. Craigslist is known for having this same problem.

Anyone can go and list their house for sale on Zillow or Craigslist for free without consequence. If their data is bad, it doesn’t matter, since there is no one there to regulate it. Anyone can list a house for sale and put any price and information that they want to get people to contact them or visit their website, but their motivation for advertising this data may have nothing to do with actually selling a house. This is one of a few major problems that causes the data to be inaccurate. Other websites are not allowing the public to add listings to their websites at this time, but their data can be equally as inaccurate, since they pull data from hundreds of different MLS services across the country. They have all been known to show homes for sale weeks after they have been sold.

The best way to find accurate data on homes for sale in any given area is to search for local real estate websites that pull the data directly from the local Multiple Listing Service (MLS). Usually, top REALTORS in the area will spend thousands of dollars every year to develop websites that will display the local MLS data, along with other relevant local area information. It may not be as technically advanced as Zillow or Trulia, but the data will most likely be much more accurate and most of the time you will find much better results from the REALTORS maintaining and servicing the website.

The national real estate websites pull data from hundreds of different MLS sources, along with multiple for sale by owner websites and other real estate listing services. They do not pull data from all of these services daily and the amount of data that they process is extremely large. This means that you can be looking at the perfect house for sale on their website, but it may already be under contract and not displaying that information yet. It also means that if a house is listed for sale, it may not show up on the national real estate websites for several days after listing. In a market where homes are selling in a day or two, this information delay could cause a homebuyer who is using their site to miss out on the best properties.

Obstacles When Selling a Home

Written by Christina Green on . Posted in Home Buyers and Mortgagors, Mortgage Services and Providers

Delighted at having soldThere are many obstacles Real Estate Agents encounter when selling a home. When you are prepared it is easier to get through it. You have to anticipate it, plan for it, and be ready when obstacles are thrown your way. How you handle the obstacles that are thrown at you in Real Estate will determine what value you can bring to any Real Estate transaction.

There are two types of obstacles to overcome in real estate sales. The first kind is before the sale takes place and the second is during the process. Issues prior to a home sale generally involve the marketing process. Problems encountered during the process are usually condition related.

A main problem Realtors encounter is getting a homeowner to understand just how important pricing is. The key is getting a seller to understand that pricing their home higher does not mean it will sell for more. In many circumstances the exact opposite occurs. An agent who knows exactly what to say when a seller wants to overprice their home is one of the keys to being successful in the business.

Some marketing problems that occur include making it difficult to see the home, requiring accompanied showings, or not presenting the home well.

One of the most difficult obstacles to handle is getting the seller to price their home appropriately. You can have the greatest marketing in the world but that will not sell an overpriced home. Real estate agents need to understand that walking away is sometimes better than selling taking a listing that you don’t feel confident in selling.

Going through an appraisal report step by step, detail by detail is important. Sellers appreciate the time and effort when it comes to the market value of their home. An agent who takes the time will get more consideration than someone who is not careful and just throws out any value.  When the seller is not in agreement with the value, carefully going over the data with them again is important.

Realtors need to realize that real estate sales come second nature to them, but a buyer or seller may do it once every decade. Buying or selling home can be extremely stressful. A realtor is there to represent their client.