Mortgage Rates

Originally posted 2009-01-03 14:21:47. Republished by Blog Post Promoter

30 Year Fixed: 5.19%
15 Year Fixed: 4.92%
1 Year Adj: 4.94%
(U.S. Weekly Averages)

Foreclosure Scams

Originally posted 2008-12-13 09:48:31. Republished by Blog Post Promoter

 

 

 

Cancellation of Interest on Your Mortgage

Originally posted 2008-12-05 07:59:21. Republished by Blog Post Promoter

     Before we discuss how we will accomplish the cancellation of interest, we must discuss a key component in accomplishing our goal of interest cancellation.

     This component is the advanced line of credit or home equity line of credit.  Why an advanced line of credit, you ask?  Well, with the advance line of credit, the lender must apply your payment to the loan balance on the day received.  Remember, with our mortgage, the closed end loan, the payment is applied, but it does not effect the mortgage in the month or day received but it effects the following months principal balance and calucated interest.

     If there is a payment several times a month on the open end loan the lender will have to recalculate interest several times in the month.  Consequently, the interest can be reduced daily (if we send in a payment daily) or several times a month.  This in turn forces the lender to recalucate your interest subsequently cancelling interest. 

      This type of account has another advantage you can take money out and put money in.  This feature is similar to your checking account.  With that being said, we are going to examine using the advanced line of credit as a checking account.    Stay tune when we pull this together.

Credit How Important Is It?

Originally posted 2008-12-24 06:41:44. Republished by Blog Post Promoter

If you are considering buying a home, check your credit first.  Most credit reports have incorrect information.  According to the US Public Interest Research Group as many as 79 percent of consumers have mistake on their credit report.

First step, I would recommend is get a copy of your credit report.  The credit bureau can provide one free copy a year and you are entitled to a free copy if your credit is denied.  There are three major credit bureaus, and they are:

• Equifax Post Office Box 740241 Atlanta, Georgia 30374 or call at  800 685 1111  www.equifax.com/fcra
• Transunion Post Office Box 1000 Chester, PA 19022 800 916 8800 www.transunion.com
• Experian Post Office Box 2104 Allen, TX 75013 800 493 1058 www.experian.com

When contacting the credit bureau by mail, please provide the bureau with proof of identity.  Provide:

• Copy of driver license
• Copy of social security card
• Last five addresses

You will need to get all three credit report because to qualify for a mortgage all three credit bureau’s score are used.  This is called a tri-merge report.   The mortgage uses the middle credit score to qualify you for the loan, so you want to make sure all three is as high as you can get them.

Once you have your credit reports look to see if all the information is accurate.  Dispute incorrect information through the credit bureau that is reporting the information in writing.  Some bureaus provide a fill in the blank form for your convenience for this purpose.  If one is not provide, write a letter that gives the name of the creditor, the account number, and the reason the information is incorrect.  The creditor has 30 days to response to the credit bureau as to the accuracy of the information.  If the information can not be verify it must be removed.

Along those same lines, all outdated information on your credit report is supposed to be removed after seven years.

Even if there is bad credit that is true.  Time is the best cure for bad credit.  If a foreclosure is on your credit your score will get better after three years and it has to be removed after seven years.  A Chapter 7 bankruptcy has to be removed after ten years.

With the frequency of identity theft, I would also recommend checking your credit often because credit fraud is difficult and costly to correct.

Related articles on credit

• How to Remove Unauthorized Hard Inquiries (bargaineering.com)
• 5 Ways To Kill Your Credit Scores (creditra.blogspot.com)
• Credit, Risk Assessment Score and Budgeting (slideshare.net)

Mortgage Fees Can Affect Your Affordability

Originally posted 2009-01-03 12:24:29. Republished by Blog Post Promoter

When choosing a mortgage company look at the fees you are being charged because that may affect your affordability of the loan at the beginning of the process.   Notice that the fees are different if you live in certain cities.   Below is the fee structure for Fifth Third Bank

 

Standard Fees	Conventional/Jumbo	FHA
 Funding Fee – PA, NJ, NY, MI, OH, IN, KY, WVA, N.KY, DE         Â	 $495.00	 $595.00
Funding Fee – IL, WI, MN, IA, SD, NE                     Â	 $520.00	 $650.00
  Funding Fee – NC, SC, GA, TN, VA, FL, AL, MS         Â	 $495.00	 $595.00
 Funding Fee – TX, MO, KS, AR, LA, CO, ID, OR, WA, NM, NV, WY, UT    *Funding fee is per the subject property’s state       Â	 $525.00	 $625.00
 Re-draw Fee   Â	 $150	 $150
 Rush Closing Request (When able to accommodate less than 48 hours Charlotte Fulfillment Chicago Fulfillment Cincinnati Fulfillment Grand Rapids Fulfillment   Â	 $100.00 $100.00 $100.00 $200.00 $100.00	 $100.00 $100.00 $100.00 $200.00 $100.00
Flood Certification               Â	 $4.00	 $4.00

 

Tax Service Fee is $72.00.  This fee is for the mortgage company to pay your taxes from your escrow account.  The taxes that is paid in your mortgage for the mortgage company to pay on your behalf sits in an interest bearing account until such time as when it is necessary to pay on your behalf.  However, the bank is charging for this when in fact they are getting paid on the money already.

Things that Make You Say Ummm

Today, there are several things that are going through my mind.  I was wondering where will the economical woes of this country lead?  Will just thinking outside the box be enough to put a bandage on the wounds or are we as a nation not as President, Congress, Senate, Democrat, Republican, but we as a nation able to heal from the financial struggles that all of us is experiencing in one fashion or another.

Let’s face it.  Financial wounds though it may not be physical hurt just the same.  The old adage “stick and stones break my bones but words will never hurt me” applies here.  Here is how.  Well, “the words” from that old adage are referring to the financial wounds.  The financial wounds that many of us is experiencing are not physical as the old adage implies, but the financial are battle scars that worrying does to the mind, body, and soul. 

At this crucial time in our nations history, we need to stop pointing fingers, calling names, or placing the blame.  We, as a nation, must stand up and be heard.    This country is free, but what is its freedom if we can not enjoy the basic necessity of shelter free of greed and injustice.  My question is: are we free if we can not live in our homes due to no jobs?   The answer is a resounding, NO.   Are we free from poverty?  The answer again is NO.    Can we be come free?  Yes, we can.  Once we as a nation realize that true freedom is giving a darn about what is really plaguing our nation, our ability to survive.  Our ability to survive will depend on the accountability that we give to companies that take their jobs overseas.  Our ability to survive will depend on the accountability that we give mortgage companies who do not hear homeowner stating, “I want to keep my home, but the adjustment in the rate is to much.” 

Remember that this time in our history has been compared to the “Great Depression”, and it is as equally important to remember that often times history has a way of repeating itself.

Even Fannie Mae is Time Conscience

The number of homeowners in default has led Fannie Mae to experiment with a pre-approval process for a short sale prior to getting an offfer on the property.

If this test works, it will reduce the time necessary to get the short sale approved and make the concept of a short sale more attractive for the seller, Realtor, and more importantly the potential buyer.  Often times,  buyers have passed and not put offer in on homes that were subject to a short sale approval due in part to the longevidity of getting the offer approved.  I am sure that Fannie Mae may have discovered as many Realtor have that the longevidity contributes greatly to the attempted short sale often times going into foreclosure.  When this happens the lender now has the added risk of losing more money by the value being exposed to the downward trend in market value. 

This experiment is hoped to yield a closing process that is closer to that of a traditional conventional mortgage or FHA loan.  Both products can take up to 30 to 45 days to close were as the short sale have taken as long as eight weeks. 

Lastly, this new concept is being experimented upon in hopes to move the market to an upward trend by reducing the amount of properties that are on the market for sale.

A Low FICO Score Is a Challenge Not a Defeat

Credit is essential to acquiring a home, car, etc. especially if you do not have cash to purchase the item you desire or need.  It is equally as important to understand how credit can influence your ability to purchase.    Let’s examine.

The bank institutions Advantage Mortgage Lending use FICO score to determine the risk factor that will be assigned to your loan.  FICO is an acronym that stands for Fair Isaac Corporation.  Your FICO is determined by a mathematical model to determine the credit risk associated with your payment history, your level of debt, type of credit used, length of credit history, and any new credit that you may have.

According to Advantage Mortgage Lending your FICO credit scores are determine by the following levels:

• 760 to 850 (Excellent)
• 700 to 759 (Very Good)
• 660 to 699 (Good)
• 620 to 659 (Good)
• 580 to 619 (Average)
• 500 to 579 (Below Average)
• Below 500 (Poor/High Risk)

Understanding your credit is crucial in regaining your credit worthiness if your credit is below average.  There are several factors that influence your credit in a negative way that you can control.

One factor that influences your credit in a negative way is too many inquiries on your credit.  Avoid opening several credit cards all at once.  In other words, a lot of inquiries influence your credit in a negative way.

Another factor that influences your credit in a negative way is maxing out your credit cards.  It is recommended to have all card balances under 35% of the total credit limit available.  For example, if you have a credit limit of $2,000 per card, the balance carried on each card must be less than $700.00. 

Still yet another factor that influences your credit in a negative way is having collections on your credit. 

All of the above does not exclude you from getting a home or refinancing a home, but it does put your loan at a higher risk; and therefore, you will pay a higher application fee and interest rate.   It is recommended that before you accept a higher interest rate to do some investigation to ensure that the loan will help you reach your goal of obtaining “financial freedom” and is affordable for you.

Good News, Investors

The flipping rules have been relaxed until June 2009.  Until recently, an investor has to wait 90 days before the investor could resell a home to a FHA buyer.

The reason for this change was because investors are helping the economy by repairing the large number of foreclosed home thoughout the country.

According to the FHA, “under the revised policy the purchasers will have to be financed capable to handle the mortgage and underwriters will talke a hard look at the appraisal.”  As a result of the changes, the FHA will not be, or at least for the time being, turning down mortgages because the previous owner owned the property for less than three months.

More Information on the Type of Mortgage You May Have

Last time, we discuss the basis of your mortgage.  We discovered what a mortgage is.  We found out that the mortgage is a closed end loan.  A closed end loan had characteristics that were not conductive to us paying off the mortgage in a short period of time.  In essence, without our mortgages we will become one step closer to becoming financial free.

                So today, we are going to discuss how we will become financial free of our mortgage.  We will discuss how to pay your mortgage off in as little as 11.5 years for a 30 year mortgage or 5.5 years for a 15 year mortgage without refinancing your present mortgage.

                Let’s get started.  First, we must understand the conventional banking way of paying off your mortgage in the time frame above.  In conventional banking, you must refinance to a lower interest rate and/or terms or pay more toward your principal to reduce the length of time on paying the mortgage and consequently reducing the interest paid to the lender. 

                It should be easy to see that in order to reduce the choke hold that the lender has on us with our mortgage we must cancel the interest we are paying the lender.  But before we discuss how we will accomplish the cancellation of interest, we must discuss a key component in accomplishing our goal of interest cancellation.

                This component is the advance line of credit or home equity line of credit.  Why the advanced line of credit?  Well, with the advance line of credit, the lender must apply your payment to the loan balance on the day received.  Remember, with our mortgage, the closed end loan, the payment is applied, but it does not effect the mortgage in the month or day received, but it effects the following months principal balance and calculated interest.

                If there is a payment several times a month on the open end loan the lender will have to recalculate interest several times in the month. Consequently, the interest can be reduced daily (if we send in a payment daily) or several times a month at the most depending on frequency of payments.  This in turn forces the lender to recalculate interest and subsequently canceling interest charged on the mortgage.  Incidentally, this loan uses daily interest cancellation on the new principal balance once the payment is applied.

                This type of account has another advantage you can take money out and put money in.  This feature is similar to your checking account.  With that being said we are going to examine using the advanced line of credit as a checking account.  We will examine applying our income to the advanced line of credit and paying our bills from the account.  When we apply our income to the advanced line of credit, we are making a payment on the advanced line of credit.  When we pay our bills from the advanced line of credit we are withdrawing from the account.

                Why have we examined the mortgage and the advanced line of credit?  How does examining these different types of loan products help you cancel interest on your mortgage?  These products alone will not eliminate interest, but if they are coupled with the money merge account software and website; interest will be reduced at a rapid rate. 

                Let’s put the money merge account to work to see how it will eliminate the interest on our mortgage.

• We will need to deposit the maximum amount of money into the advanced line credit account per month.
• Next, we want to allow the money to stay in the amount as long as possible.
• Lastly, we want to take out or spend the less amount of money or credit from this account each month.

Now let’s examine a model monthly budget.  Remember, we will not change what we spend our money on, but how we spend it.  First, we must have the after taxes monthly amount.  For our example, the after taxes amount is $3000.00.  The monthly living expenses are $1,750 with $1,250 left in discretionary income.

                Next, you will to get the advanced line of credit, as long as you get a $10,000 line of credit you will be able to pay your mortgage quicker than with your type mortgage payment. 

                In this example, we do indeed have a $10,000 line of credit. 

                In month 1 with the money merge account.  There is one time fee for the software of $3500.00.  This can come out of the line of credit.  Now, there is a remaining line of credit of $6500.  Now, the living expenses will be paid from the money merge account.  The living expenses were $1750.  This makes the line of credit have an average daily balance of -$5250.  This is how the interest cancellation comes into it.  -$5250 has $3000 income applied to it making the daily balance $2250.  The charges on the $2250 at 10% interest rate are $22.50, but we make a payment of $3000 on the account.  In essence paying more than what the bank was looking for.  The interest is on the daily amount.

                Stay tune to the next blog where we pull this all together….

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