Compare Mortgages Questions and Answers

mortgages...?

Q) hypothetically asking, if you buy a house with a 30 year mortgage from a bank, and the bank went out of business. no sell out, no merger, just incompetent people running the place. do you still have to pay the remainder of the mortgage or is the house yours to own for good?

A) Unfortunately, the now defunct banks loans are picked up by another bank that the borrower would now need to pay. This does happen from time to time, and most of the time the loans are sold prior to the bank going under, so there is no lapse in payments. The borrower would receive a new payment notice from the new bank before the next payment was due.

mortgages?

Q) does anyone know a good website to get a mortgage for people who have really bad credit?

A) how bad of credit and in what state? Depending on these two factors I may be able to help you personally, or I can refer you to a coworker who can work with you to get a mortgage.

Assumability of FHA Mortgages and release of liability?

Q) I am receiving conflicting information. I have one mortgage broker stating that no conventional fixed rate mortgages are assumable and must be refinanced. The bank itself is giving conflicting information. The rep on the phone states they will send out an Assumption of Mortgage and Release of Liability package, while the rep that the broker deals with for that bank says they don't have assumable mortgages. According to this site http://finance.yahoo.com/loan/mortgage/ask_the_professor/article/101609/Should_I_Assume_the_Sellers_Mortgage it would appear that if the mortgage is FHA insured that it IS assumable. Are all FHA loans assumable, or only those that do not have "due on sale" clauses? Who is right? The bank doesn't even seem to know the answer. Located in NJ. Are Freddie Mac mortgages assumable under any circumstances?

A) All FHA loans are assumable, but many years ago they changed it so that the new borrower must qualify and you were still held liable if they went into default. I have been a mortgage broker, real estate salesman for 25+yrs and can tell you that you are getting some bad info, if you want to IM me we can discuss it further

I have 2 mortgages and a second mortgage on my unsold house what are my options to transfer my second mortgage

Q) I need to transfer my second mortgage to my new home so I can lower my asking price for my unsold home. I am currently paying 2 mortgages and a second mortgage. Is there a way to transfer my second mortgage to my new home? I have only lived in my new home for 4 months and finances are getting tight. The equity is low to none in the new home.

A) You're in a situation that a lot of people are facing right now and there are more than a few solutions to your problem. 1. You can obtain a loan for 105-125% of you new homes value. This may or may not be enough to pay off your existing second mortgage but it may help pay down your second mortgage enough to lower your asking price. Keep in mind that the rate associated with this may be higher than what is typical for a second mortgage on a home with more equity. 2. You may, on the other hand, want to consider a short sale on your old home. A short sale is where you contact the bank on your second mortgage and have them agree to take less than what you owe. This may affect your credit in a negative way, however, it won't be as bad as a foreclosure. 3. Your third choice, is to refinance your old home and get the cash you want/need and then rent it out. This might have some tax benefits that you should talk to a CPA about. If you got into a good loan, then you would not only have your equity but you could rent out your old home for more than your monthly mortgage obligation. I hope this helps. If you need more info, feel free to email me for my phone number.

What different types of mortgages are there? I dont want to be scammed?

Q) I dont want to get scammed into taking a mortgage I dont need. Can a mortgage expert enlighten me on mortgages. i would also like to hear the laymans views as well. How many types are out there; Pros and cons. I just heard of an inerest only but the only sense I can make from it is that there is no principal on the loan. Does that mean I would have to take another mortgage on the principal. What a balloon mortgage? Sounds like something that would blow up if I'm not careful. Once I decide on the mortgage that would best suite me do I then look for a bank. I dont want 5 different bank looking into my credit report. Can I run my own and hand each one a copy? What are the pros and con of using a bank instead of a mortgage boker and vice versa.

A) Ok first off: What is your main reason for wanting to refinance? There are litereally hundreds of loan programs on the market today. Some are horrible for one person and the best for another. Interest only loans are great if you want to keep your monthly obligation to your mortgage payment at a minimum. However if you simply make the required monthly payment nothing goes to principle. But you can always make additional payment to the principle. You can run a copy of your credit at www.annualcreditreport.com this is the website the FTC recommends to use for a free credit report. However when you do go to apply, the lending institution will still need to run your credit. A balloon mortgage is a loan amortized over say 30 years but the balanced is owed say in 15 years. So if you refinance before the 15 years is up you would not need to pay off the loan on the 15 year. These are usually for 2nd mortgages or people with bad credit. Across the nation, it has been proven that Mortgage Brokers have an average interest rate & fees that are less then Banks (because they are more competitive. So I would recommend using a licensed agent at a broker's office. Make sure the loan agent/officer is licensed! If you live in California, I am a licensed Loan Officer and I would be happy to show you your options. The best thing for any loan officer to do for you is find out what your future plans are for the property as well as future financial goals, then customize a loan program to meet those goals & needs.

Types of mortgages for a commercial building?

Q) I am trying to purchase a mixed use building (5 residential units and 2-4 commercial stores) in NJ. I know that commercial mortgages are a little different from home mortgages (i.e. there are no 30 year loans). What different types of mortgages are available for purchasing a building like this? Also, the money borrowed to buy a home is called a mortgage, is it also the same term used for buying a commercial property?

A) Commercial loans have only a little similarity to commercial "business loans". The common denominator between the 2 is usually you. They almost always use your credit, your current assets, possible using your equity in other sources (as a means of collateral). The other factor of course is the actual property you wish to purchase. If it debt services strongly enough, many options can open up to you. Commercial business loans are a lot more complex than residential and take considerably longer to complete. You would be surprised what is available to in the commercial market for a loan. Each loan scenario has it's own conditions, and you need a professional consultant to help you find the loan that best fits your need. I know of 30 year loan options, 90% loans, leverage buy-out investments, SBA loans (7A & 504), Stated Income, etc.

Why aren't there more "assumable" mortgages?

Q) I know this probably will be a dumb question for anyone in the real estate/mortgage business, but I'll admit that this is one area that I'm not too knowledgable on. I know that there are some assumable mortgages out there, but they are rare and hard to find - I'm just wondering why that is.... Say Joe Blow doesn't want to or can't make his mortgage payments - he doesn't want to default on his mortgage or just walk away from it, but here's Sally Doaks who's willing to take over the payments for him and basically assume the mortgage. If she has to put down a little "earnest money" she can. The only reason I can see that this option isn't offered more is that maybe there isn't enough money in it for anyone in the mortgage business. I'm probably missing something here - like I said, I'm not too knowledgeable about the mortgage business, maybe someone can explain this one to me. Thanx! All good answers so far - it's going to be hard to pick a "best answer". Everyone's added a little something different - too bad I can't combine a few together for a combo best answer :-) I didn't realize that in a lot of these cases the original holder of the mortgage was still held liable if the second person defaults. I guess I just took it for granted that in an assumable mortgage, the second person that assumed the mortgage also legally assumed the liability for defaulting on it. If that's not the case, then I can see why most people would not want to do it, I certainly wouldn't if I were the original holder of the mortgage. But that still leaves the question - why aren't there more assumable mortgages where the liability for default is also assumed? One answerer mentioned that with all of the costs and work involved in this for lenders, they would be just as well off originating a new mortgage, and that makes sense too.... Anyway, thanks for all of your answers so far

A) The main reason mortgage loans are not assumable is that banks earn fees upon mortgage origination. A secondary concern is that at the time a property is sold (which is when you would want the mortgage to be assumed) the lender would have to reevaluate the condition of the property and the creditworthiness of the new borrower. If they are going to go through that work they might as well collect the origination fees that go along with it.

Understanding Mortgages in the UK?

Q) I want to understand how Mortgages work, 1. What determines the size of mortgage you get and how you pay it off? 2. And how do you switch a mortgage from proerty to property?? Im a dummy so please keep it simple!UK "Real Estate" only (Im sure its different in the US!)

A) there are generally two things will determine how much mortgage you get: 1, Obviously, how much the property you want to buy is. If it's £100,000 and you have £10,000 yourself then you'll need a mortgage of £90,000. Typically, most lenders will only lend you a maximum of 95% of the property value (i.e. £95,000 in the example above) but some are 99%, some 100% but expect to have to pay them extra for this. 2, How much you can 'afford'. Most lenders will only let you borrow a maximum of 4 times your yearly salary. i.e. if you earn £20,000 a year before tax then they probably will not want to lend you any more than £80,000. If you are getting a joint mortgage with someone else then it's usually 2.5 times your joint salary. (i.e. you £20,000, other person £15,000, total = £35,000 so maximum mortgage = £87,500) You generally pay it off in monthly repayments spanning many years (typically 25 years). All this time the amount you borrow is accruing interest so obviously if you can pay it off sooner then it will save you money. When you 'switch' a mortgage, the best way to think of it is you sell one house, and pay off your mortgage, and then just take out another mortgage for the next house.

Refinancing & Combining two mortgages?

Q) Hello, I have two mortgages that I would like to combine. The 80% mortgage has a rate of 6.0% until next year when it becomes adjustable. I have a 20% mortgage that is at 11.5%. I don't know if its a good time to refinance and combine both mortgages. I would love to lower my monthly payment. You're thoughts?

A) If you continue to wait chances are the rates are going to continue to increase. Therefore the longer you wait, sure you will be able to keep the 6% rate for 1 more year before your payment goes up, however the rate that you are going to get stuck with for the remaining 30 years is going to keep increasing (most likely). So you are most likely better off refinancing them into 1 now to get the best rate that you can for the life of your loan. Good luck to you, shop around with a few different companies to make sure you are getting a good deal.

Mortgages whats the catch? read on?

Q) I've seen on TV/internet where they offer $200,000 mortgages for $800- $900 per month. I have excellent credit and when I applied for a $150,000 mortgage my payment was going to be over $1,000 per month with no PMI. So what is the catch to those low monthly payments? Is it for a few years then they skyrocket?

A) Hi Dustin, I work for one of the big 6 financial instutions in Canada. Congratulations on having excellent credit! When it comes to the question of $200,000 mortgage with a payment of $800-$900/monthly, in all likelyhood the mortgage is going to a mortgage broker or insurance company who offer lower rates with stricter policies, and or terms/agreements. This means you could be locking yourself into an agreement that when you become displeased with the services, have a question, or problem you don't have the leverage or ability to say I am transferring my mortgage to another bank because of the penalties you may incurr. It is a legal contract you are signing. When it comes to mortgages check out all big 6's websites to view the mortgage calculators, and look for the book - banking for dummies (or something like that). Make sure you account for the downpayment needed to purchase- you want to make sure you have at least 25%(of the value of the home) as a down payment otherwise you are subject to a 2% surcharge(on the full value of the home) from Canadian Mortgage and Housing Corporation or General Electric insurance. The minimum you can put down on a house is 5%. There are some options for no down payments but the premium is HUGE. Always best to have a down payment!!! The advertisement may be from the USA- they have different mortgages than in Canada. Good Luck!!!