Palm Beach Real Estate and Loans

The latest buzz in the home finance world is................. Mortgage Modification.

There's nothing wrong with trying to get your home loan modified so that it becomes more affordable - it's done every day and it really can help out a lot of people.

BUT...

Did you know that you can do the work yourself?

That's right, you don't need to pay someone thousands of dollars to get your mortgage modified - what you need to do is call your lender and discuss your situation directly with them.

There's no guarantee that they will be able to do exactly what you want, but all it takes is a phone call to get the ball rolling.

The only time I would suggest having someone do the work for you is if you have absolutely no extra time to do the work yourself - then you are basically paying for someone to do a bunch of annoying phone / paperwork.  

If you do decide to go that route, just make sure that you run screaming in the other direction if someone even hints about an upfront charge.

Another thing you want to avoid is a self-titled 'Mortgage Modification Expert' - trust me, there aren't any!  The program just started.

I don't know why the mortgage industry keeps spawning more and more garbage, but the flow seems to be endless!

Read George Souto's article - Homeowners Beware!

Today's post is from Jason Price of Knightlines Mortgage Services:

Effective Monday, April 20, 2009, the income eligibility guidelines for USDA 100% guaranteed mortgage loan financing will be changed.  The change, unlike most changes in our current mortgage industry, is for the better.  So what is the change?... Higher income limits in bracketed tiers versus the original per family member sections.

Normally, I would compare the difference, but who really cares what once was if new is better.  (If you really want to see the old values, click here.)  So here is what the new tiers with higher limits looks like:

AND TOTAL INCOME CAN BE MUCH HIGHER THAN THE ADJUSTED INCOME LIMITS

If you total income exceeds the limits, certain adjustments can be made, such as childcare expenses for children age 12 or younger. You can deduct $480 for anyone under 18 or a student who is not one of the applicants. Other deductions may be available. No need to memorize deductions. Use the calculator here <Click 'single family under "Income Eligibility">

Example: Lee County 4-person family (2 adults, 2 children) has a gross income of $84,560. Child care for the two children age 12 or less is $10,000 annually. Is the threshold income at or below the limit? YES! $85,860 less

$10,000 child care less $480 for each child = $74,900.  They are within the limit.

Want to see if you qualify or become pre-approved?  Call us today to get the process started, or simply click "Apply Now" on the right or top of the page and complete our short application.  By the way, check out todays rates on USDA 100% guaranteed home loans by clicking on todays date in the DAILY RATES Calendar.

I'll try to keep today's post simple-

Earlier today, President Obama talked about the record low interest rates available for home loans and how this is a great time for millions of homeowners to refinance.

Quite a few news sources criticized him for sounding too much like a salesman - but hey, they have to have something to complain about....

Regardless, the fact remains that interest rates on mortgages are STILL available below 5%.

So if you're looking to change your adjustable-rate loan to a fixed, or just get the rate dropped on your current fixed-rate home loan, NOW would be a great time to do it.

Or, like so many people are inclined to do, you can wait and wait - until rates go up again and you can start with the "I wish I would have" game.

Call me if you're ready to refinance-

Today's post comes from Jason Price of Knightlines Mortgage Services:

Two weeks ago, President Obama introduce his plan to stave off foreclosures by giving incentives to banks to help homeowners that are not currently in default lower their payments and take advantage of lower rates.  Today, that plan was approved and rolled out by Fannie Mae through its Home Affordable Modification Program.

Homeowners that are currently struggling to make their payments, but are not yet behind now have relief.  They can refinance their home through FNMAs Home Affordable Modification set to roll out in April.  Foreclosures will be temporarily suspended while this and other options are looked into; however, if these are not viable solutions, then the foreclosure will continue.

Lenders are encourage to lower interest rates to where a homeowners monthly mortgage payment (principal, interest, taxes, and insurance) are less than 38% but greater than 31% of their monthly gross income.  If a drop in interest rate is not enough to get to this limit, then a the loan term shall be increased to 40 years.  If this is still not doable, then the lender can forbear principal.  And should a lender choose, it can forgive principal.

Any rate changes are valid for a period of five years.  After the fifth year, the rate shall increase up to 1% per year until the interest rate cap is reached.  There is a whole detailed explanation on the rate cap that I will not get into at this time, but the cap is fair.

Mortgage insurance may not be required for these transactions that may now exceed 80% loan-to-value.  The decision is based on the overall strength of the loan being refinanced/modified. Home values will be based on either a Automated Valuation Model (AVM) or a Broker Price Opinion (BPO).  In other words, no appraisal.

Over the course of the next couple days, I will be putting more information up about this plan and program, as there is many variable surrounding it.  In the meantime, feel free to click here and download the program guidelines for your own reading.

"Should I refinance the mortgage on my Palm Beach Gardens real estate?"

Thats a very common question and the basic answer is: If you can save money, then yes you should.

BUT-

To arrive at the conclusion that you will actually save money, youll have to look at several things:

• #1 How much will it cost to get the loan? EVERY loan costs something.  If all other factors were equal, the loan with the lowest fees would be best. (The 'No-Cost mortgages you hear about are a crock.  No, you aren't paying anything up front, but to compensate for that you will be paying a higher rate so there certainly IS a cost for the loan!)
• #2 How much lower will the payments be on the new loan? If you currently have a 30 year, fixed-rate loan for $300,000 @ 7.00% your monthly principle and interest would be $1996. If you could get a new rate of 6.00% your monthly payment would drop to $1799, while 5.00% would be $1610.

So now you take the cost of the new loan and divide it by the amount of money you'll be saving each month.  That shows you how long it will take before you REALLY start to save money with the new mortgage.

For example:

• If the loan cost $3500 but your payment dropped by $250 per month , it would be 14months before the cost of the loan was equaled out by the savings.  A relatively short time. In this case the refi would make sense.
• But if you were only saving $50 each month it would take 70 months nearly 6 years before the refi would be worth it.  Will you even be in the home that much longer?  If not there would be no reason to refinance the loan.

Feel free to contact me with any questions you may have-