http://backend.userland.com/rss092 http://www.mortgagefit.com/rss/most-popular.xml The most popular section includes financial resources frequently viewed and used by guests and community members at MortgageFit. The section provides information on financial issues to help people manage their finances in a better way. sam.mortgagefit@gmail.com Sat, 10 May 2008 08:48:15 GMT en-us http://www.mortgagefit.com/quitclaim-deed.html http://www.mortgagefit.com/quitclaim-deed.html Quitclaim deed is a legal document that helps to transfer your share of interest in the property (house, land, mobile home, etc) to another individual. The person giving away the interest is the grantor while the one who accepts it is the grantee. While the interest is transferred, no warranty is made on the rights which others may claim from the property. The deed implies that the grantor simply transfers his interest but does not guarantee whether the grantor actually has ownership rights on the property. Moreover, the deed does not guarantee that the property is free of debt. To help you get a clear idea of the quitclaim deed, I have divided the information into different sections as given below: How to make the deed validWhen to use the quitclaimHow a life estate can help after you sign over the deedReverse/Undo a quitclaim deed How to make the deed validIn most states, only the grantor and not the grantee sign the Quitclaim deed form as prepared by an attorney. But there are some states which do require the grantee to sign the deed. After the grantor signs the deed, a notary public should sign and stamp it without which the deed is not taken as valid. At present, only a few states like Arkansas, Georgia, Michigan, Ohio, South Carolina and Vermont require the deed to be signed by witnesses other than the notary public to make the quit claim valid. Officials from states other than where the property is located can also notarize the deed. This however depends upon the County Recorder of that state. The deed is then recorded at the land records office in the county where your property is located. The Office is called the County Recorder's Office, County Clerk's Office, Register of Deeds, and Land Registry Office depending upon the state where you own the property. After being recorded, the deed is often sent to the grantee or the grantor, title insurance company or anyone as decided by the parties. When to use quit claim deedThe deed is commonly used in the following situations. In a divorce, married couple can transfer ownership of the property to one spouse. A spouse may add or remove the other spouse's name to/from the property title after marriage. While a property is purchased, at closing the interest is transferred from the seller to the buyer through this deed. If a property is sold off to the new owner and the title shows the old owner as having certain rights, the previous owner should sign a quit claim and transfer all his rights to the new owner. A person planning for an estate or a living trust uses the deed to transfer ownership of the property into a trust.How a life estate can help after you sign over the deedEven after signing a quit claim, you can have the right to possess the property only if you retain a life estate for yourself. The life estate gives you the absolute right to stay at the property till your death. Otherwise, you have no legal right to the property after the deed is signed off to the grantee. After your death, the grantee gets the right to possess the property. Reverse quit claimOnce you have signed a quit claim, it becomes very difficult to reverse or undo the deed unless the grantee agrees to quit claim the property back to you. In case the grantee refuses to sign, you will have to prove that the transfer of property is invalid. For instance, you can prove that you signed the deed under threats, external pressure or may be the grantee made you sign by telling lies. In order to show the transfer is invalid, you can take help from a lawyer. No doubt, a quit claim is a good option if you wish to take over or give up interest in a property. But as far as the transfer of title or ownership rights is concerned, it offers no warranty. Experts therefore suggest another deed for transfer of ownership rights - the warranty deed which claims that the property is transferred in clear title, that is, it is free from any kind of lien. Related Forum Discussions Will grantor lose rights on property after quit claim? Can quit claim remove name from title? Can quit claim deed transfer mortgage debt? Will quick claim protect my home from creditors? Tax implication of Quit Claim Deed Owner deceased: Is quit claim deed possible? Quit Claim under Tenancy-in-Common Is quit claim a way to remove co-borrower from title? Can I quit claim myself off property before it gets to foreclosure? Which is better - Interspousal Transfer or Quit Claim Deed?Consolidated InformationIf you are not getting the required information, click here for a consolidated information on Quitclaim Deed. http://www.mortgagefit.com/reverse.html http://www.mortgagefit.com/reverse.html If you're a senior person looking to cash in your home equity and use it to your advantage, a reverse mortgage can help. With a reverse mortgage, you can convert your home equity into a steady flow of tax-free income thereby receiving a paycheck at regular intervals. Since the loan provides easy flow of cash, therefore it is the preferable choice of seniors in the US as well as in UK, Canada and even in India. This article will help you get an idea of reverse mortgages, especially the aspects given below.What is a reverse mortgage?Do I qualify for the loan?How much of cash is available?How do I get the cash?Are there any drawbacks? What is a reverse mortgage? Reverse mortgage is a home loan which provides you with cash if you're planning for retirement or have already retired. Such a loan does not require to be paid back until the loan period is over and you can continue to own your home even during the life of the loan. Do I qualify for the loan? Unlike other loan options, there isn't any income or credit requirement to qualify for a reverse mortgage except that there shouldn't be any debt on your home. And, even if there is, it should be paid off by the cash proceeds of the reverse loan. To be eligible for the loan, one has to be 62 years or above. Know more How much of cash is available? The amount you receive through a reverse mortgage will depend on:How old is the youngest borrower?The appraised value of your homeThe equity built up in your homeWhat loan program you chooseCurrent mortgage rates How do I get the cash? You can receive funds from a reverse mortgage in different ways. The lender or the company can provide you with a single payment.You may ask for monthly cash advances.You can apply for a credit-line account which gives you the opportunity to withdraw a required amount of cash whenever you are in need.The lender may allow for a combination of monthly cash advances as well as andquot;credit-line accountandquot;. Are there any drawbacks? A reverse mortgage is just the opposite of a traditional mortgage which requires the payment of the principal loan amount along with interest on a monthly basis. This helps you to build up home equity thereby raising your home value. But with reverse mortgages, there are no such monthly payments. Hence, the total debt starts going up. The home equity therefore reduces to an extremely low value unless the home value goes up at a higher rate. Therefore reverse mortgages are often known as andquot;rising debt and falling equityandquot;. An example on andquot;Rising debt and falling equityandquot;. Monthly Loan Amount : $2,000 Yearly Loan Advance : $24,000Yearly Interest Rate : 8%Original Home Value : $250,000Appreciation Rate of Home Value : 5% per annum End of Year Principal Amount ($) Total Interest ($)Loan Amount ($) Total Home Value ($) Home Equity ($)(Total Home Value - Loan Amount) 124,0001,05225,052 262,500237,448248,0004,102 52,102275,625223,5233 72,0009,22481,224289,406208,182 496,00016,495112,495303,876 191,3815120,00025,990 145,990319,070173,080 The above calculation shows, even if your home value goes up, it may not be enough to raise your home equity. The rate of appreciation in home value should be high enough such that even if your loan balance increases, your home equity won't go down easily. Inspite of its drawback, reverse mortgages are preferable options when it comes to paying for your healthcare costs, remodeling your home, making a big purchase and changing your lifestyle. Moreover, if you have debts to pay off, need money for someone's education or make plans to go on a vacation, reverse mortgages are worth considering. Related Articles:Comparative analysis of Reverse Mortgage and others.Eligibility of Reverse MortgageReverse Mortgage - When to pay back?Is Reverse Mortgage safe?Types of Reverse Mortgage ProductsTaxes for Elderly Mortgage ApplicantsRelated References:Mortgage For SeniorsKnow More About Reverse Mortgage http://www.mortgagefit.com/refinance.html http://www.mortgagefit.com/refinance.html Are you looking forward to get extra cash, save more and pay off all your debts? Or, do you wish to replace your current mortgage with a new loan having more favorable loan terms. There's a way out by which you can fulfill all such needs - a process called refinance (or refinancing). It gives you the chance to pay down your current home loan from the funds offered in a new loan against the same property as the collateral. For example: Mr. X and Mr. Y both took a mortgage loan worth $400,000. After 4 years, both of them paid off $200,000. Mr. X then took another home loan worth $200,000 in order to repay the existing balance on the loan. On the other hand, Mr. Y opted for a second home loan worth $300,000 in order to repay the unpaid loan balance which is $200,000. Mr. Y could use the remaining balance in order to fulfill other financial obligations. The first case is regarded as mortgage refinancing and the second where the new loan amount is higher than that of the existing loan balance, is a cash-out refinancing. 6 Reasons for you to Refinance You want to save more Reduce monthly payments by getting a lower mortgage rate or a longer loan term. In the second case, your monthly savings increase but you will be paying a larger amount of interest for the life of the loan. You want to pay down your mortgage quickly Shorten the length of your mortgage by reducing the period of repayment. Monthly payments will no doubt go up, but you will be able to save more in the overall interest payment. Moreover, it will allow you to get home ownership in a short time. You need extra cash Borrow more than the unpaid loan balance if you have enough home equity. With the extra cash, you can pay off high interest debts such as credit card balances or installment loans. You gain out of it as the interest on these debts are not-tax deductible unlike the mortgage interest. You wish to pay off a high interest second mortgage If there's enough equity at your home, you can refinance your second mortgage and combine both the loans into a single loan. The monthly payment on the new loan is likely to be lower than the combined payments on the first and second mortgages. You want to convert from an ARM to an FRM This allows you to lock in at a low rate. You can thus repay the loan with stable monthly payments rather than variable payments throughout the life of the loan. You want to get rid off PMI If your current loan balance is below 80% of the new appraised value of your home, you can refinance and stop paying PMI. When to refinance your current loan Refinancing can be a way out to keep you from making higher payments but you can only get the maximum benefits when you're into the process at the right time. Here are a few conditions under which you may seek a refinance loan. You have the home equity to help you borrow It is feasible to can go for a refinance when you have built up at least 10% equity in your home (For Fannie Mae owned mortgages, the value is 5%). It is also possible for you to choose the option if your equity is less than 5%, but you may have to pay a certain amount of cash in order to make up for the difference in the equity. You find that current market rates are low It's better to follow the 2% Rule which suggests that you can enjoy the benefits of a refinance if you can secure an interest rate 2% below the rate on your current loan. The interest savings will help you to recoup the costs you've paid for the new loan provided you stay in the property for a certain period of time (break-even period). However, there are no-cost as well as low-cost refinance loans wherein the costs are included into the loan. You can expect a slightly higher rate on such a loan but if it's lower than your current rate, then it's still a suitable choice. You haven't been late on the payments There is no such limit on the number of times you can go for a refinance. Most lenders prefer that you have no late payment for the past 12 months before you switch over to a new loan. When not to refinance Refinancing does not make sense under the following situations:Your property value has gone down If your property value reduces and you refinance up to 80% of the reappraised value, your original mortgage amount may be higher than this amount. Thus, the new loan will not be sufficient enough to help you pay down the existing one. You are paying off the first loan for a long time If you are making payments on a long term loan, say, a 30 year mortgage for the past 10 to 20 years, then refinancing to another 30 year loan will not be a good option as it may increase your overall payment. Your credit profile isn't impressive If you have messed up with your credit by delaying payment on loans and bills, there is hardly any chance that you will qualify for a low rate mortgage. Off course there are lenders in the subprime market, but it's better to avoid them as they'll possible charge you with higher rates and fees. You have used up enough equity in your home Refinancing may not be that useful if you have already used up 90% or more of your home value in taking out a mortgage or any home equity loan. You won't be able to get the best rates available in the market as when you refinance a 90% LTV loan, you will probably require a loan of that value or higher. This will be quite closer to being a 100% financing option and hence the rates will be comparatively higher. You have a few years left on the current loan If there is only a few years left on your current loan, then there's not much use refinancing it with a long term loan. You may need extra cash but with a long term loan, you may end up paying more throughout the loan period. In this case, if you do not move according to a planned budget then it will be hard to carry out your day to day expenses.Refinancing will make sense if you are into it for the right reasons and at the right time. You need to decide upon the various ways of refinancing and the possible loan options that will suit your needs and fit into your situation. Related Readings How to refinance your current mortgage Which Refinancing Option suits your situation? 9 Mistakes in Refinance committed by mortgage seekers Top 24 queries on RefinanceRelated Forum Discussions Should I need a title insurance at the time of refinance? Is it possible to refinance after bankruptcy? Should I refinance my home to consolidate the debts? Can i refinance my home which is filed for Federal tax lien? Is the cash from Refinance - Taxable?Is it possible to combine ARMs and then Refinance? http://www.mortgagefit.com/second-mortgage.html http://www.mortgagefit.com/second-mortgage.html You may need a lot of cash but cannot avail it through credit cards or any other means. Here's where a second mortgage can help you. This article gives you an overview of second mortgage and covers the following aspects:What is second mortgage?When do you choose a second mortgage?How much can you borrow?What are the possible rates, terms and fees?How to get a second mortgage?What happens to the second loan if you refinance the first?Do it yourself! Check out whether second mortgage is the right option for you What is second mortgage? It is a loan taken against your home on which there exists a primary mortgage. The second loan has less priority compared to the first on the same property. So, if you default, you need to clear your first loan prior to paying off the outstanding balance on the second loan. When do you choose a second mortgage? There are situations when you may think of cashing out on your home equity. You may have accumulated a large amount of debt through auto loans, balances on high interest credit cards and other bills (medical costs, kid's tuition fees etc) and need to pay them off. There may be an opportunity for you to invest cash in a business. You can then use a second loan to go for it. But check out if the rate of return on your investment is higher than the second mortgage rate. Only then it will turn out to be a profitable venture. You may plan to avoid paying private mortgage insurance. But this is possible only when you get a second loan that makes up for 20% of the home purchase price. You may wish to repay debts and eliminate judgments, pay for your car, purchase a vacation property or plan for a vacation. You can obtain the required cash by taking out a second loan. How much can you borrow? A second home loan allows you to borrow on the basis of your home equity. The equity is the difference between the current appraised value of your home and the amount you have paid towards the first mortgage. With most lenders, you can take a second loan such that the total loan-to-value ratio of your first and second loan is equal to 85% of the home's appraised value. However, there are lenders in almost all states excepting Texas and West Virginia who allow you to take out second mortgages equal to 125% of the appraised value. What are the possible rates, terms and options? The interest rates on a second loan are higher to that of the first loan. This is primarily because if you default, you will be paying off the first loan prior to that of the second and as such there is a risk involved in offering second mortgages. However, you may choose either a fixed rate home equity loan or an adjustable rate home equity line of credit as your second home loan option. The lender will quote you a rate depending upon your credit score, total loan to value ratio and the current market trends. The loan term will vary from 15 to 30 years depending upon the option you choose. But in general, a second loan is offered over a shorter time period compared to a first loan. How to get a second mortgage? Getting a second mortgage is similar to taking out a first mortgage on your home. You need to shop for a suitable loan offer by approaching different lenders and getting quotes from them. You can simply fill out a no-obligation free short form to get quotes from the community ranked lenders. Then you should compare the quotes, find out the offer that can cost you less in comparison and provide all necessary paperwork while you apply for the loan. The lender will conduct an appraisal on your home in order to determine its current value and complete all the steps that are necessary to complete the loan processing so that he can arrange for the closing. At closing, you will be signing the note and other documents as required by your lender. You will have to pay closing costs similar to that of your primary loan. What happens to the second mortgage if you refinance the first? When you refinance the first loan after getting the second mortgage loan, you should request your lender for a subordination of the second loan. This implies that your second home loan will be considered as a junior lien compared to that of the refinance loan. Otherwise, if you do not subordinate it, the second mortgage will be taken as the first lien and the refinance loan will take over the second lien position. In this case, there will be less risk with the second loan but higher risk involved with the refinance as a result of which the first mortgage refinance will cost you more in interest charges. With a second home loan, you get the chance to tap a large sum of money. Moreover, you can deduct the interest on your taxes up to a certain limit. But you cannot overlook the costs and the high interest rate associated with a second loan. Besides, if you default on the second loan, you may lose your home. Therefore, prior to going for a second mortgage, it is best to prepare a budget and find out how much you can afford to pay in addition to the first loan. Related Articles10 Big Mistakes while looking for second home loanTapping your equity with a Home Equity Line of CreditSteps to protect your equity while shopping for Second MortgageRelated Forum DiscussionsCan I get second home loan with bad credit?Should I take out second mortgage to pay for credit card?Home sold due to foreclosure - Am I liable for second loan?Second mortgage charge off - What does it mean?Is Second mortgage interest tax deductible?California Second Mortgage on rental propertyDo I need to pay for second loan even after charge off?What happens to second mortgage after deed-in-lieu of the first? http://www.mortgagefit.com/mobile-homeloan.html http://www.mortgagefit.com/mobile-homeloan.html If you're a home buyer looking for housing options other than traditional site built houses which cost you more, then mobile/manufactured home may be the right choice for you. Mobile homes are first built in factories and then taken to the site where it may or may not be given a permanent foundation. What are the types of mobile home loans? Mobile home loans are available as mortgage and personal property loans.Mobile home mortgage loan: If the home has a permanent foundation, you may take out a mortgage loan for buying both the land (lot) and home, or either the land or home. The loan covers the cost of your home as well as any repair work done on the lot depending upon whether the appraised value is equal to the selling price of the mobile home. You can approach local banks, lenders, mortgage companies, brokers, and credit unions offering loans for mobile home purchase or refinance. When you apply, the lender will ask for credit report fee, loan application fee, loan doc preparation and origination fees etc. Get a good faith estimate from the lender to get an idea of the costs involved. Know how to qualify and what are the loan options to apply for. Personal Property loan: This is meant for purchase of homes on a rented lot as in mobile home parks. Personal property loan is offered by retailers who sell mobile homes. In order to qualify, you need to put down 10% of purchase price for 10-30 year loans. The interest rate will be 2-3% higher than mortgages, fixed or variable. But you can qualify with higher debt ratio and use the loan funds to cover home plus lot improvements (walkways, garages etc). For improvements on an already owned mobile home, you can go for the Title I loan, but the limit should be within $7500 to be treated as personal property loan. What about tax benefits? Whether the mobile home loan is a mortgage or not, the interest on it is deductible provided it is used to secure your principal residence. If you have a mobile home mortgage and itemize your taxes, you can deduct the interest and property taxes on your Federal income tax return. You can also deduct the interest on a loan for mobile home in a rented lot. But the rent payments are not deductible until you have a 15 year or longer lease with a lot purchase option. How to qualify for mobile home mortgages: You are eligible if the conditions given below are fulfilled. Foundation requirements: Mobiles homes built prior to 1976 hardly qualify for mortgage because lenders are concerned over the life expectancy and quick depreciation of such a home compared to that of traditional site-built houses. The manufactured home must follow the building standards proposed by HUD under the Federal National Manufactured Housing Construction and Safety Standards Act of 1974. The HUD code requirements are as follows: The houses must be built as one, two or three section homes in a protected building center and then transported on a frame to be installed on the site. The wheels and axles must be removed and the mobile home should be fixed to the ground to give it a permanent foundation. As per HCD rules, you need to record form 433(A) which implies that the home is changed from personal to real property due to it's permanent foundation. The homes should comply with the HUD code restrictions for construction, design, durability and strength, fire resistance, energy efficiency, transportability and quality. The property should maintain high standards for heating, plumbing, air conditioning, thermal and thermal systems. The property must pass through strict inspections conducted by third party. Ownership Rights: The borrower must have absolute ownership (free of liens) rights except if the loan is required for a lot which consists of a share in a co-operative association owning and operating the mobile home park. Purpose of the loan: The loan must be taken in order to purchase or refinance only a manufactured home with the lot/land being owned by the borrower, the home and the lot on which it is situated, only the lot on which the mobile home (already owned by the borrower) will be installed. The home must be the principal residence of the borrower. For a lot loan, the mobile home must be placed on the lot and must be the principal residence within 6 months after the date of the loan. If the loan is meant for a home in a mobile home park, then the lease on the home should extend for at least 5 years beyond the loan term. Credit Score: Borrowers must have a minimum credit score of 620 in order to get an affordable rate of interest. However, you may get loans in spite of having poor score but you'll be charged higher interest rates. So, you can try for loans that are not score driven but even such loans require you to have a moderate credit score of 550 and above. Down payment: Lenders expect you to put down 5-10% of the purchase price for newly built homes for a loan term of 15 to 30 years depending upon your credit profile, size of the home and type of loan. For a pre-owned home, the down payment is the same but loans are available for 20 years depending upon the factors stated above. Types of mobile home mortgage loans: Federal programs: FHA approved lenders offer Title I loans for purchase and refinance of manufactured homes for a loan term of 20-25 years at a fixed rate of interest. They also offer Title II mortgage loans on manufactured homes. The maximum loan limit for homes located on land you own is $175,000. Besides, there is the VA guaranteed manufactured home loan offered to veterans by private lenders. With such a loan, you can borrow up to 95% of the purchase price. There is also the USDA Rural Development offering 30 year term loan programs for manufactured home purchase and repair. The programs stated above are specially meant for first time buyers who can put down little cash and look for lower rates of interest. State programs: State Housing Finance Authorities/Housing Agencies offer mobile home loans to first time buyers at rates comparatively lower than that offered by private lenders. For instance, lenders approved by the Maine Housing Authority offer the First Home Program to first time buyers of mobile homes. Then there is also the first time buyer mobile home loan program offered by the Connecticut State Housing Finance Authority. Conventional Loans: Such mortgages are offered by private lenders, banks, etc with conforming as well as jumbo loan packages ranging from 15-30 year Fixed Rate loans, 3-2-1 Buy down loans, to 6 month-1 year ARMs, and Hybrid ARMs (3/1, 5/1 and 7/1 year loans). There are amortized as well as interest-only options available. Know more about popular loan programs. Bad Credit Mobile home loan: These are sub-prime loans offered to those having andquot;Bandquot;, andquot;Candquot; or andquot;Dandquot; credit due to late payments/loan defaults/bankruptcy or foreclosure in the past. Bad credit loans can be FRMs as well as ARMs but the interest rates and costs associated with such loans are usually high. So, if you cannot afford higher payments, wait till your credit improves and then apply for a prime loan. No income/No asset verification loans: If you're self-employed and unable to verify your income and assets, then this is right choice for you. Here again the interest rate and costs are higher on account of higher credit risk involved with this loan. These are also known as NINA loans. Construction loans: You can apply for construction mortgages to build your mobile home and also make improvements on the land. These loans are available at fixed as well as adjustable rates during the construction period after which the loan is converted into a permanent mortgage. Mobile home land loans: You may wish to purchase land and then set up the mobile home or you may be willing to purchase a lot in a mobile home park. For such purpose, make use of land loans. Home improvement loans: Such loans help in financing mobile home improvements. The Title I Home Improvement loan insured by FHA is an example.Apart from the options stated above, there are mobile home refinance and equity loans available with specific lenders. All you need to do is, understand your purpose of taking the loan and then choose the right one depending upon your affordability. Related Forum DiscussionTop 20 Queries on Mobile/Manufactured Home Loan Personal loan using Mobile home as collateral Mobile Home Repossession Mobile Home Reverse Mortgage for seniors Is there any federal tax lien on the mobile home? Are they similar - Mobile, Manufactured or Modular home?Related References: FHA insured Title I loan for home purchase/refinanceTitle I loan for mobile home improvementVA guaranteed manufactured home loanRural Development Manufactured home loans