Amazing Blurbs

Equity With the majority of the country in a declining real estate market the amount of equity you have in your home plays a major factor in your loan qualification. Homes that are similar in size to your home and are in the same vicinity determine the current value of your home. What have the homes that have recently sold in your area gone for? Most homes are losing value due to the rise in the current foreclosure market. If the bank had to foreclose on a property they need to be able to sell it for what the market supports so this is how they value it. (Bank foreclosures are not in the interest of the bank.)

If you are looking to purchase a home or refinance your existing home into a lower rate or different loan program the amount of equity you have in the property is one determining factor for what loan programs you qualify for and if you can get the best current market rate.

Income A very important factor in any loan transaction and one of the first questions the bank asks themselves. “Can this person afford this payment?” The general lending guidelines are if your loan amount is under $417,000 your total monthly debt payments (credit cards, mortgages, auto loans, taxes and insurance) need to be about half of your gross income if you are a salaried employee and about half your adjusted gross income if you are self employed. If your loan is above $417,000 you will need your debts to be at or below 45% of your income.

Assets Personal liquid assets are a qualifying factor for a mortgage and also to qualify for the best rates available. If a borrower can afford the loan but has no room for error if something happens in their life that they can not predict such as medical bill or unplanned travel they had not budgeted for they may have to forgo paying their loan to make money available for something else. The mortgage bank will ask that you have between 2 and 6 months worth of mortgage payments saved up that you can access if needed.

Credit Score Your credit score is analyzed from the three major credit reporting agencies. (Transunion, Equifax, and Experian) You are given individual scores from each agency and lenders will use your middle score as a barometer for rating your credit reliability. Most of the best loan options are available for consumers with 720 middle scores and higher. Your credit score is like a life report card that allows companies that extend credit to make sure that the people they are lending money have the willingness and ability to repay them. This reporting/measuring tool becomes very important when a company is determining whether or not to lend you hundreds of thousands of dollars.

These are the main qualifying criteria to for mortgage loans. A great first step when applying for a mortgage is to see how you size up in each of these categories. If you are serious about getting a loan and think one or more of these areas may be in question asking a mortgage professional in the best place to start. Lending experts have the tools and knowledge to help you find a loan that fits your needs. It is our job to analyze your financial situation and work on your behalf to pair you with a bank that will lend to you and give you a loan that benefits your financial future. A home is the largest investment most people make in their entire lives. Make sure you have qualified assistance when making this decision.

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It’s that time of the month again, and we pull out the checkbook to cut that monthly mortgage payment and flush some more of our hard earned cash down that bottomless void known as the “Upside-Down Mortgage.” What can you do to help the situation? What are the viable options? Everyday we’re inundated with TV commercials from banks, savings & loans, and attorneys and mortgage companies. Who’s going to really help? Who’s going to break my wallet? This is the exact situation I’m facing RIGHT NOW.

I not late on any payments, but I am working like a dog to keep up with them. I won’t be able to sustain this speed for very much longer. You see, I started investing in rental homes a while back and have faithfully stuck with them through thick and thin. Now I’m struggling and looking for help and looking at my options. People keep telling me I’d be in a better position if I had missed some payments!!

My personal “end of the rope” was when my rental homes had each reached over $100,000 in depreciated loss. I figured that even if I kept making the payments, and the market rebounded, I’d be a slave for many years. In other words, if the market suddenly started appreciating again at the same rate or faster than “the good old days”, let’s say 15% a year, it would still take me 6.6 years to just regain the loss. No appreciation, no recovery of expenses, insurance, tenant hassles, taxes, etc. Just pumping most of my paycheck down a black hole. At one point, it just doesn’t make sense anymore. The actual situation is probably worse because in this economy, the days of 15% appreciation are long gone! So what do I do?

This is the question I was facing when I first decided I was in trouble. Maybe your in the same position. I owe more on the house than it is NOW worth. The quintessential upside down loan. So I looked at everything from lawyers to banks to real estate agents. Here are the options I found out there. Some of them might be right for you . . . . .

1. Keep juggling the payments and keep the faith! This option is really subject to your income and monthly expenses. The question for me was if I was willing to hack it for 10 years. Who knows though . . . . it may take longer depending on when the market actually begins to recover. In reality, it will probably take MUCH longer. You know what they say, “You can’t time the market!”

2. Loan Modification is another option. This is a fairly painless process where you contact your bank and they send you a hardship package. This is a big stack of forms where you try to look as poor as possible, documenting your income and expenses. You simply send the package in and wait . . . . . and wait. . . . . .and wait. Finally they’ll give you a reply with a possibly lowered interest rate and terms.

3. Short Sale: This is sort of a pre-foreclosure sale. Your late on a few payments, and the bank takes a serious look at you and threatens foreclosure. You find a realtor to represent you and present the hardship package. The realtor prices the home at a substantial discount and finds a buyer. They present the offer to the bank, and the bank usually accepts the deal, which is a positive situation for all. The bank is always interested in short sale instead of foreclosure as it saves them 10s of thousands of dollars in hassle and legal fees, and allow both parties to move on to new business. You should remember that there are still negative ramifications for short sales, even if less damaging than those associated with foreclosures and/or bankruptcy. However, short sales do carry less negative effects than foreclosures. Short sale sellers are widely seen as more credit worthy than foreclosed sellers. Case in point, Fannie Mae recently adjusted their guidelines to dictate only a two year waiting period for a short sale seller to buy another primary residence, while they extended the waiting period for foreclosures to five years.

4. A Deed in Lieu of Foreclosure is one of the banks least favorite options. This is where you just hand over the deed, and say goodbye to the bank. The lender has to then sell the house to recover it’s losses. The bank will subsequently provide the borrower with 2 documents. One document will cancel the debt and relieve the borrower any further debt, and the other one assures they can never come back to you for the money.

5. Foreclosure: This is the final option and if you like to go to court, then this is the option for you. In foreclosure, the lender first sends you a summons to appear or foreclosure complaint. The borrower responds to prevent foreclosure and explains the problems at a hearing. The borrower can this point you can still pay the full amount and get the house back during this redemption period. After the redemption period is over, the lender sells the property a public sale or auction and getting as much as they can (or settle for). Any excess goes to you, the original owner/borrower. If the sale amount is less than the loan amount, and in your case it probably will be, you will still owe the balance to the lender. This amount is determined as a result of deficiency proceedings.So as you can see, as we go down the line, the options get worse and worse! As far as my situation, I have to walk away from at least 3 houses. I’m losing a hell of a lot of money, but I’m getting my life back.

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When it comes time to finding more mortgage leads, you may want to consider turning to a mortgage leads company. These companies make it their job to track down the leads you need to maintain your business. In an industry that is highly competitive, highly resourceful and very profitable, any company that wants to get ahead needs to invest the time and energy into getting every lead that is available to them. Some of these companies have just what it takes to give you these resources.

You may be asking how to increase your business with mortgage leads from these sources. If you have selected the best companies to work with, you pay a small fee to obtain any and all of the leads they have to offer. They send you leads that you can easily contact and get information on. It is essential to choose a company that is reputable, one that is not recycling leads over and over again and one that you can contact easily if there is some type of problem. When you do this, you will have a wide variety of mortgage leads to work with.

When you locate these mortgage leads companies, it is important to work with companies that give you flexibility. You should be able to select the type of leads you are most interested in. This is often a rate or score that works for your particular need. You may want exclusive debt consolidation mortgage leads, for example. Depending on what the company has available, and your stipulations, chances are good you will get the type of leads you need to make the investment worthwhile. If you are unable to choose from these options, you may want to consider a company more flexible.

The bottom line is quite clear: if you want to have a successful business in the mortgage industry, you need to have a regular stream of customers. You need to be sure that that stream of customers is highly qualified and that they have not been contacted by many other brokers in the recent past. Once you get this information, you can work the leads as you would any other. You will walk away with more deals and transactions than if you were to wait around for borrowers to contact you. Many of today’s top mortgage brokers use these services for just this reason: they work.

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