FHA loans were mainly designed to help borrowers get low cost mortgages at easier terms and conditions. However, will time, rules have become excessively strict which has in turn frustrated the borrowers and have slowed down the real estate recovery. But the good news for condo unit owners is that the FHA (Federal Housing Administration), though presently mum on this topic, is trying to bring some changes in their condo rules. Due to their strict rules, a large number of condo units have become ineligible for low down payment mortgages.

Various requirements for getting a FHA mortgage for condominiums include non-owner occupancy percentage, condo association fees which can’t be delinquent, non-residential space usage, etc. FHA officials consider these strict guidelines as important as these will help them in avoiding losses in the insurance fund. However, they have now decided to reconsider some of the strict guidelines that have upset condo owners as well as the real-estate industry.

It is also expected that FHA is also going to clarify their stand on the personal liability language. They are also planning to make other modifications on various other rules. This is something which the industry experts and unit owners are likely to welcome with open arms.

There are certain financial and psychological benefits of repaying your mortgage loan early. If you are indeed interested to pay off your mortgage early, there are some smart and safe ways to do so. Here we briefly discuss some of them.

Pay more than the minimum

By using the mortgage calculator, you can get to know about the minimum amount that you will be required to pay each month so as to repay the mortgage loan. If you pay more than the minimum amount, you will be able to get rid of the loan obligations much early. However, you also need to ensure that the extra payments that you make each month do not put strain on your finances.

Refinance with a shorter-term mortgage

One good option to pay off your mortgage early is to refinance your mortgage with a shorter term mortgage loan. You can refinance a 30-year mortgage loan with a 15-year mortgage. The monthly mortgage payment on a 15-year mortgage loan is higher than that of a 30-year mortgage loan.

Consider switching to biweekly payments

In order to pay off your mortgage early, you can opt for biweekly mortgage payments, instead of monthly mortgage payments. The extra annual payment that you make by switching to biweekly payment mode actually helps you get rid of mortgage loan obligations much early.

By following one of the above mentioned methods or by following any combination of these methods, you can pay off your mortgages early.

In the mortgage loan business there is person who plays a key role in the mortgage approval of a borrower. This important person, who is known as a mortgage underwriter, is appointed by the mortgage lender, and that person can not be seen or interacted by the borrower. Usually, a lender does not approve a loan to a borrower without the consent of the underwriter. In fact, an underwriter is responsible for assessing the risks associated with a real estate loan. An underwriter judges the creditworthiness of a mortgage applicant. He or she determines whether or not a homeowner will be able to pay back the loan. The underwriter scrutinizes the loan application and evaluates the credential of a loan applicant. Once he or she gives the nod, the loan is then approved by the lender. Here we briefly discuss below the role played by an underwriter.

Verification of income

One important role played by an underwriter is the verification of the income of the loan applicant. The aim is to judge whether or not the applicant will be able to repay the loan. In order to come to a conclusion, the underwriter examines the current pay stubs and the past tax returns.

Verification of assets

Assets of a borrower are also verified so as to get an idea whether or not the applicant will be able to pay the down payment and the closing costs. The underwriter checks the bank statements and the deposits of the borrower, in order to come to a conclusion.

Assessment of the credit score

One important determinant of obtaining a mortgage loan is your credit score. An underwriter assesses the credit situation of a borrower and decides upon the loan approval of the borrower.

Review of the collateral

The property that the borrower is planning to purchase is reviewed by the underwriter. It judges whether the lender will be able to recover the loss in case the borrower defaults in paying off the loan.

The role of an underwriter in the mortgage loan process can not be denied. In fact, the efficacy of the mortgage business very much depends upon the performance of the underwriters.

There are many of us who have moved out of a property and have started staying in another one. Thus, your previous homes are presently vacant and now you want to sell off that vacant property. Though it is not very easy to sell off a vacant home, here are certain tips which will help you in selling off the property. Selling a vacant home is a challenge as such properties need to be insured, maintained, staged as well as secured against unlawful residents and hooligans.

4 Tips to sell vacant homes

Here are some of tips which will help you in selling your vacant home:

Vacant home insurance: Your home insurance coverage may change if you’re not staying in that property. So, if your property is vacant, you should check your home insurance policy to see the changes in your coverage for a vacant property. Once you know the changes, you can take required precautions in order to save the property from any kind of damage.

Securing vacant home: It is very important to secure your vacant home from hooligans. It is suggested that you should put some lamps on timers. This will make the home look like someone lives in it. Make sure that you check out whether or not the doors are locked on a regular basis. You can even set an alarm in your property which works even when you’re not at home. You can also build a cage around your air conditioner in order to save it from any kind of damage.
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Owning a home is a long cherished desire of many of you. Right home purchase depends upon the careful selection of a mortgage lender. Here we briefly discuss about some tips which will help you find out a credible mortgage lender.

Seek for references

One smart way to find out a reputable mortgage lender is to finding out references of credible lenders. You can seek references of mortgage lenders from your friends, relatives and family members who have already taken out mortgage loans. Talk with them and get to know about their experience of working with a particular lender.

Consider the costs aspect

Before taking out a mortgage loan, check out all the costs associated with a home loan. Fell free to ask as many questions as possible so as to get an idea about the exact cost. This will help you find out a mortgage loan which is affordable to you.

Do the ground work

A large number of mortgage lenders are operating in the market. Check out the rates offered by different lenders, along with the type of the loan. You can carry out this research online.

Do negotiate with lender

Once you have selected your lender, the next step is to negotiate with your lender for lower interest rate and lower fees. Check out with your lender whether or not anything can be cut.

Once you have selected a reputable mortgage lender who offers you an affordable and competitive loan, the next step is to seal the deal.

There are some closing costs associated with a home mortgage loan. Closing costs are the costs that borrowers have to bear at the time of the closing of the mortgage loans. Closing costs can be in the form of loan origination fees, discount points and appraisal fees. Loan origination fees are the costs that arise while making the mortgage loan. Loan origination fee is also known as origination point. Again, discount points are prepaid interest demanded by lenders in return of lower interest rate charged on the loan amount. An appraisal fee is kept as the security for the mortgage loan and it is charged on the basis of the value of the property. Apart from these, other closing costs associated with a home mortgage loan are credit report fee, attorney’s fees, survey fees, pre-paid items, title fees, loan processing fee, recording and transfer charges etc.

It is to be noted that you should not select a loan provider just because of the fact that it charges lower closing costs. Instead of looking for low closing costs, you should always look for reasonable closing costs. If you pay no closing costs at all, you will have to pay high rate of interest or stiff prepayment penalty will be imposed upon you. Though in case of no closing costs, you will be able to save something today but it implies that you will be actually buying an extremely expensive long-term loan. Anyways, while purchasing a home mortgage loan, you have to be very careful about the closing costs associated with it. A credible mortgage broker will show you most of the items that are included in the closing costs. Again, there might be some brokers who will not show you all the items listed in the closing costs. So, it is very important to select a right lender who shows the closing costs properly.

The worst outcome of a loan default is foreclosure. This is a legal process which implies that your lender can take over your home. In that case, you have to leave your home. Again, in case the value of your home is less than the amount you owe, a deficiency judgment is pursued. In case of a deficiency judgment, you not only have to lose your home but also have to owe an additional amount to the HUD. Again, both foreclosures and deficiency judgments have serious negative effects on your credit. These will imperil your chances to get a new credit. Here we briefly discuss about some ways by following which you can avoid foreclosure.

Mortgage modification

One smart way to avoid foreclosure is to opt for mortgage modification. Through mortgage modification, you can extend the term of the mortgage loan that you have taken out or you can also opt for mortgage refinancing. Anyways, this will lower down the monthly mortgage payment amount and will make the mortgage loan more affordable to you.

Mortgage forbearance

Sometimes, your lender may be willing to offer you a new repayment plan. The new repayment plan may include a temporary reduction in the loan payment or suspension of the loan payments. But, you have to convince your lender that you will be able to fulfill the requirements of the new payment plan.

Deed in lieu of foreclosure

A deed in lieu of foreclosure implies voluntary giving back your property to your lender. Though, a deed in lieu of foreclosure would not save your house, but the negative impacts of deed in lieu of foreclosure are less than that of foreclosure.

Foreclosure is regarded as the last option available before you. The negative consequences of foreclosure are deep and remain for a long time. So, you must try your best so as to avoid filing for foreclosure.

Till date mortgage interest deductions were applicable for second homes as well as vacation properties. However, in a recent update, it was noted that many industry experts want the mortgage interest deductions for vacation properties and other non-primary residences should get eliminated.

What does the provision provide for?
Mortgage tax deductions allow the tax payers to deduct their mortgage interest payments on their second homes while they are filing their taxes.

What have the experts said about this elimination?
As per the opinion of certain industry experts, like Lewis Ranieri, the deduction is nice but is not necessary. Apart from this, he has also said that mortgage deductions on primary-residence should also be regulated and limited. Even the Congress as well as the Obama administration are in an agreement on this issue.

Now it is for the home buyers to wait and watch as to when this mortgage deduction will get eliminated.

Purchasing a house is indeed a very big decision. Various legal, emotional and of course financial considerations are involved in house purchase. Before making the purchase, you need to educate yourself and importantly you need to learn from the mistakes committed by others. Here we discuss about some common mistakes that you commit while purchasing the home.

Do not make hasty decision

While making the big decision to purchase a home, do not make any hasty decision. Do not rush on to looking for homes. Rather take your time, do adequate research, compare the different rates offered by different lenders and then make the final decision.

Do not overbuy

Out of excitement, it is often seen that many of you tend to overbuy. This is particularly true for the first time home buyers. Without focusing much on the ground realities, many of you tend to buy a large home which may not be actually required. Purchasing a big house implies that you would have to take out a very big home mortgage loan. You may find it difficult to repay the loan.

Not getting the mortgage approval

One smart decision would be to get the mortgage pre approval before making the actual purchase. This will help you get to know how much mortgage you will be entitled and what will be your monthly mortgage payment amount. This will help you make the right purchase. However, it is sometimes seen that many of you do not get the mortgage pre approval before taking the mortgage loan. This often puts you in a spot of bother.

Short cutting the inspection process

Many of you tend to short cut the home inspection process so as to save a comparatively small amount of money. However, this may actually lead to more loss for you as there might be some defects in the property.

Purchasing a home is a long cherished dream for you. So, you should make a realistic and wise decision regarding home purchase.

It has been estimated that there are more than 11 million homeowners who are delinquent in their mortgage payments. In such a situation, there are a large number of people who are facing foreclosure. The option of short sale is available to such delinquent borrowers. However, for the last few years, lenders were taking quite some time to approve as well as complete the short sale process. However, Feds are hoping that new timeline rules will change this and also speed up the short sale process.

What is the new timeline all about?

As per the new timeline, if your loan is owned or secured by the Fannie Mae or Freddie Mac, you can expect a response for your short sale request within the next 30 business days. The lender will send you his final decision no later than 60 days. If your lender is unable to give you any response with the first 30 days, the bank will be required to send you weekly updates letting you know where the holdups are and when they can get this resolved. Those banks or lenders, who don’t follow these rules, will face monetary and other penalties.
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