Sammarusich Blog

Mortgage Modification-Crunch the Numbers!

            Is your current mortgage payment (Including property tax and insurance) more than 31% of your income?  The governments “Making Home Affordable” program is incredibly generous, the home equivalent of the “Cash for Clunkers” program.   We  have achieved mortgage payment reductions of over 50% for clients that were never late on their mortgage- they had just experienced or were about to experience a reduction in income.  This includes clients that had their new mortgage payments calculated and reset based on their impending pension income rather than current employed income!  There are 37 lenders participating in the “Making Home Affordable” program and working with them makes predicting an outcome easier however, we have also achieved mortgage modification for Non-participating lenders (Including West Suburban Bank and Key Bank).

  We achieved our first mortgage modification in April of 2008 and have now successfully worked on behalf of our clients with most major lenders.  Please contact us ASAP so that we can review your situation and determine whether the “Making Home Affordable” program is likely to be available to you.  Our attorney can be retained for only $500 upfront with any/all remaining funds due AFTER a loan modification has been offered to you.  Do not pay ANY upfront loan modification fees to ANYONE that isn’t an attorney licensed to practice law in Illinois.  Retain an attorney and pay for results!.  Falling Behind? Don’t Wait!  If you are currently delinquent, have experienced a reduction in income or are going through savings to keep up on the mortgage then act now

 

 

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One of the popular ways to save money on mortgages is to use what is known as the biweekly mortgage payment plan. With the biweekly mortgage payment plan the borrower makes payments on his mortgage every two weeks, instead of once a month. The biweekly payment is one-half of the monthly payment. So, if you converted from a monthly plan to the biweekly plan and you had been paying $2,000 a month for your principal and interest, you would now be paying $1,000 every two weeks. There is no doubt that this will save you money. By using the biweekly mortgage payment plan, you’ll pay off your loan much earlier than you would have if you continued to pay monthly. Typically, a biweekly plan will pay your mortgage, in full, 7 to 10 years earlier, on a 30-year mortgage, than a monthly plan will.

At first glance, it looks like the biweekly plan is magical. In reality, however, there is nothing magical about a biweekly mortgage payment plan. The reason a borrower is able to pay off his mortgage sooner with a biweekly plan, is because he is, actually, making additional principal payments. In the example above, where a $1,000 payment is made every two weeks, $26,000 is being paid toward the mortgage every year. This is because, quite simply, there are 26 two-week periods in a 52-week year. With the regular $2,000 per month plan, $24,000 is being paid per year.

Now, let’s run the numbers on this $2,000 a month mortgage and see what happens when we convert to a biweekly payment plan. With a thirty-year mortgage at 7.5 percent interest, our borrowed amount is $286,035.25. With a borrowed amount of $286,035.25 at an interest rate of 7.5 percent and a $2,000 a month payment, you would save $114,697.00 by converting this mortgage to a biweekly payment plan. This seems astounding! Doesn’t it?

Here’s what makes it less astounding. Using the same numbers with a monthly plan, except using a monthly payment of $2,166.67 instead of $2,000, the saved amount is $113,682.90. Not a whole lot less astounding than the biweekly plan, is it? Why do we use a monthly payment of $2,166.67 in place of $2,000? As we noted before; when we pay a biweekly mortgage plan, we end up making one extra monthly payment per year. In our example, $2,000 is the amount of the extra yearly payment. $2,000 divided by 12 means we would be paying $166.67 extra monthly after we converted to a biweekly plan. Paying $166.67 extra each month, at 7.5% with a total borrowed amount of $286,035.25, ends up saving us almost as much with the monthly plan as we would save with the biweekly plan!

The reason the biweekly plan saves a little more than $1,000 more than the “pay a little extra each month” plan is that a $1,000 payment is made two weeks sooner with the biweekly plan. We could save just as much by doing this with our own plan, or, try this: Take the $1,000 first biweekly payment and divide it by 360 payments (30 years). Now take that $2.78 and add it to the $166.67 extra payment and it changes the monthly payment from $2,166.67 to $2,169.45. With this as the monthly payment and all other entries being the same, this plan will save $115,003.69 over the course of the mortgage; or, a little more than the biweekly plan. You see, the biweekly plan forces the payer to start paying down the interest sooner than a monthly plan because the biweekly plan demands a payment two weeks sooner. To compensate with our own monthly plan, we have to make our first payment two weeks sooner, or split the amount of the first biweekly payment, $1,000 in this case, over the course of 30 years. This makes us pay the same amount into the mortgage in the exact same time as the biweekly plan does.

Here’s what’s astounding to me! When you convert to a biweekly plan, leading lending institutions charge you between $400 and $1,300 and some lesser-known biweekly conversion companies charge you a monthly fee that can amount to $10,000 and up when totaled! As you’ve just seen, you don’t need to pay these excessive fees because you can get the same effect of a biweekly mortgage plan by simply keeping the mortgage you have and paying a little extra principal each month. Certainly, you can institute this plan without paying any upfront fees!

Also worth noting is; when you commit to a biweekly plan and the extra money becomes too much for you to pay some month, you’ll get hit with a late charge for not paying on time. If you institute your own plan, maybe you’ll be a little short and not able to pay the extra amount some month, but it won’t cost you a $35 to $100 late charge.

So you think my calling biweekly mortgage plans, “a scam”, is being a little harsh? I don’t think so, in fact, I think they are out and out robbery!

Ed Lathrop is a successful Real Estate investor. He has developed EzCalculator, a Mortgage Calculator that calculates anything to do with mortgages, shows you how to pay off credit card debt and much more. EzCalculator includes a Biweekly Mortgage Calculator and the famous “How to Make $100,000 on Paying Down Your Mortgage” calculator. There are no popups or spyware at this site. Come visit this free site at Free Mortgage Calculator!

You might be encountering a number of factors influencing you to sell your home quickly.But you have limited options for it’s quick sale.You can either try to sell your home on your own by putting up an advertisement for it or you can go for it through a real estate agent.Both these options usually can give you anything but a quick disposal of your home.Perhaps your home could be in the market for months,thats even if it can be sold at all.In the meantime you will have to payout the fees to the real estate agent for putting up your home on the market,and it’s definitely not cheap.

However,there is one option which can assure a quick home sale and that is by looking out on the internet for a specialist company which offers to buy your home for cash and the process takes only a couple of weeks or even less than that.You can apply to the specialist company like us on the form provided mentioning few details required.Upon receiving that they will get back to you with their offer price for your home.If you are pleased with the offered price someone will have the valuation done for your home and then hand over a written quote.You can then sell off your home for cash and move on with your life.

Amongst the various circumstances from which you can benefit by a quick sale of your home is if you are going through a divorce process.It’s a very stressful and a life changing situation to deal with and that too if you have to sell off your home so as to distribute the proceeds received from sale between both of you.If you are selling your home for this reason,then the situation may get better if you are able to sell the property quickly and then move on with rebuilding your life.In such a sale procedure if a partner wants to stay in the same property they can choose to go for sell to rent option which gives the opportunity to sell and rentback the property.Another circumstance to go for a quick sale of your home is if you have to emigrate and you want to leave with cash in your pocket from the sale proceeds of your home and it would also solve the problem of coming back to your property to get things tightened up.There are many advantages of going for a quick sale of your home through a specialist company,like no tension on paying out fees to a real estate agent for putting up your home for sale in the market and having the offer for sale in the market for months.In just 24 hours you can realise if this was the right option for you to choose.

Selling your home quickly by this procedure can also be beneficial if you need huge amount of cash in your hands and you are not willing to take a loan or you are not getting it.You can select this option of selling your home quickly and get free from the equity in it and you can pay monthly rents which are affordable and live in your property as a tenant alongwith the option of having an opportunity to buy it back in future when things get better.

Real estate expert Oliver Wingrove specialises in quick house sales so that you can payoff your existing mortgage and avoid repossession. Alternatively if you are looking for another way out of debt you could find a debt advisor who will be able to answer all of your debt management questions.

 

Whether you are purchasing a new Florida home, renovating a house, or simply making your current home more energy efficient, the FHA home loan can be the solution to monetary concerns or problems. Since being established in the early 1930s during the great depression, the Federal Housing Administration has aimed to assist all people to live in their dream homes, be it in Florida or any other Florida county we serve including Miami Dade, Broward and Palm Beach Florida. Time tested and government backed, there are few excuses to pass up a FHA loan.

The largest percentage of a person’s life is spent in their Florida house. An FHA loan provides comfort and makes sure that time is well spent. FHA does not lend money to Florida mortgage applicants, however serves as insurance to lenders so you can obtain a mortgage or loan to renovate or purchase a Florida house. With a down payment equipment untouchable by any other mortgage program of 3.5% of the purchase price of the home, and some programs that require no money down, the benefits of an FHA loan outweigh its costs.

Florida is a beautiful state full of beautiful homes. The dream of owning a Florida home may seem difficult at first, but with thanks to the Federal Housing Administration, that dream is not an impossible. FHA mortgage programs can help you become a homeowner with the help of an easy, hassle-free FHA mortgage loan.

Like many home buyers and homeowners looking for a Florida mortgage, 1st Continental Mortgage has weathered the storm and come out stronger and wiser. With a keen focus on core principles and products like the FHA home loan, we’re ready and able to make a broad range of real estate loans throughout Florida. Other advantages to the FHA Home loan include:

Mortgage Programs With Minimal Down payment and Closing Cost

Down payment less than 3.5% of Sales Price 100% Financing options available Seller can credit up to 6% of sales price towards buyers costs. No cash or bank reserves are required. FHA regulated closing costs.

Easier Credit Qualifying Guidelines

No minimum Credit Score or credit score requirements. FHA will allow a home purchase 2 year after a Bankruptcy. FHA will allow a home purchase 3 year after a Foreclosure

Thomas Martin
FLorida FHA mortgage specialist
http://www.fhamortgageprograms.com/florida/Palm-Beach-County/,
http://www.fhamortgageprograms.com/florida/Dade-County/
http://www.fhamortgageprograms.com/florida/Broward-County/,

I saw a cartoon the other day that was pretty funny, but also pretty sad when you think about it.  It showed a couple sitting across from a mortgage lender, and the caption read, “We’re here to apply for a tank of gas.”  With increases in prices for just about everything, it gets more and more difficult to stash away a nest egg for a down payment.  And pretty much every loan requires some part of down payment, even if you get a 100% financing loan.  After all, you still are generally going to be required to put down some earnest money on your contract and in most cases, pay for an appraisal up front.  You may have been trying to save it up on your own, but it may be time to accept some help from your family.

 

Most loan programs, be it Conventional, FHA, VA or Rural Housing, require the borrower to pay for something.  In particular, FHA and Conventional home purchases want a minimum of 3% to come out of the borrower’s pocket.  If you are doing a Conventional loan, you still can’t receive a gift for your 3% down payment, but you can use a gift to help with closing costs. However, FHA will allow your source of down payment to be a gift.  So, if you find yourself a bit short on cash, you may need to ask someone to gift you the down payment or closing costs (or if your really lucky, and it’s allowed – both!).

 

All lenders are particular about just who can give you a gift for your down payment or closing costs.  Pretty much across the board, the gift must be from a blood relative.  You may have to prove that the gifter is a relative thru birth certificates, christening records, etc.  Strange but true.  Conventional loans will also allow an employer to give you a gift.  But in any case, the most important factor is that whoever is giving the gift does not expect to be paid back.  A certification to that effect will be required to be signed by the donor.  Otherwise, it’s really a loan, now isn’t it?  And as a responsible lender, we’re going to include that payment in your debt to income ratio, and we’ll probably want a bunch of documentation to prove the terms, etc.  So, make sure it truly is a gift.

 

As of the date I’m writing this article, FHA will allow for down payment assistance programs, such as Nehemiah or Ameridream.  Lenders view these products as “gifts” in a sense. They are basically seller concessions funneled through the down payment assistance channels.   However, by the time this article is published, they may be null and void.   It’s currently being reviewed and could go away.  Or it may still be there, but just know it’s under review.

 

Lenders are very particular about how the gift funds reach the closing table.  If you deposit the gift before closing, you have to show it coming out of the donor’s account and depositing into your account.  It’s a lot of paper to collect.  The easiest method is for Grandpa or your Great Aunt to just send a cashier’s check payable to you and your title company to the closing table.  Smoother, quicker, simpler.

 

Gifts are a wonderful thing, and a gift of a down payment is a useful gift.  After all, I think it’s safe to say that homeownership is one gift that keeps on giving, wouldn’t you?

Let My Experience Work For You!
Email your home loan financing questions to Kristin Abouelata, Home Loan Specialist with Mortgage Investors Group, at question@kristinmortgage.com or call direct: (865) 567-0113 Toll Free: 1-800-489-8910. For more information visit her website at www.kristinmortgage.com Home Loans Plain Talk.