Reduce Your Mortgage Online

With today’s economic crisis we are seeing record highs of foreclosures on the market. If you are in this situation there is probably a million questions running through your head.

Probably the most important, and most frequently asked, is how it will affect your credit. Of course a foreclosure on your credit history will be detrimental.

Natalia Osorio Editor of the “Stop Foreclosure Loans” website — http://www.StopForeclosureLoans.org — pointed out;

“…There really is no disclosed number of points that will be docked from your credit score; however an unofficial number has been rumored to be around 260 points. A good credit score is 700 or higher. An average credit score is around 600. Therefore if you’re current credit score is at 650 you can roughly expect your score to drop to around 390. Even if you have an excellent score of 800 your score will be dropped to around 540 which are still considered to be a negative credit score…”

There are two main reasons that we as a country are currently in this housing crisis. The economic crisis was started by borrowers taking out bad loans, and lenders selling the bad loans to the consumers. Most of these loans included arms which is where the payments were low for the first few years. After the first few years the payments would skyrocket. Lenders would sell these loans to consumers by telling them that they would be able to sell their homes or refinance their homes when their payments increased. Other bad loans included variable interest rates. This again would give a good introductory interest rate, and then the interest rate would increase exponentially after the first few years making payments impossible for the home owners.

This started a domino effect which eventually leads us to record breaking unemployment rates. Because there were millions of these types of loans all at the same time it forced many home owners to go into foreclosure. This affected many industries including banking and real estate. It then got difficult for these consumers to afford or finance anything which then hurt other industries such as automotive and furniture.

“…If you are in this situation there are a few things you can do to stop foreclosure. There are many foreclosure assistance companies that can help you go through your bills, consolidate your debts, and negotiate with your mortgage lender to get your monthly payments down to something you can afford. You can also contact your mortgage company immediately and try to work out a loan modification. You should also research options such as short sales, a deed in lieu, or cash for keys…” N. Osorio added.

Further information about how to get professional assistance with a mortgage loan modification by http://www.StopForeclosureLoans.org

Hector Milla runs his corporate website at http://www.OpsRegs.com where you can see all his articles and press releases.

Article Source:http://www.articlesbase.com/mortgage-articles/how-does-a-foreclosure-affect-your-credit-1786824.html

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The question of taking out cash when refinancing is a common one for many consumers. It all depends on your circumstances and how you feel after going over the pros and cons. With rates now being the best they have ever been, you may be able to get the money you need at the lowest rate possible.

Pros Of Getting Cash Out When Refinancing

-Extra cash in your bank account/emergency funds
-Money for home improvements
-Money for other purchases

In the economy that we are living in today, there are not many people who are fortunate enough to have much of a savings account. When doing a refinance and taking cash out from the new loan, you will be able to stash that away in your checking or savings account, giving you extra money in your accounts for any unexpected expenses. Now, when something like car repairs or a trip to the hospital comes up, you will have the money available to take care of these expenses.

Another reason getting cash out when refinancing could be beneficial is that it can give you the ability to complete home improvement projects that you have been wanting to take care of. The longer you live in your home, the more work you are likely going to want to do on it. Remodeling your kitchen, adding a deck or a swimming pool, or the need for new windows are just a few of the many things people use cash out for when refinancing their mortgage.

Getting cash out when doing a refinance also opens up the door for other things that you have always wanted, or can help in purchasing things for events that are coming up in your life. Many people find that getting cash out from their refinance can help in getting their son or daughter the car they wanted for a graduation or birthday present. You can now also be able to go out and get that big screen TV or new computer that you have been waiting for. Whatever it is that you want or need, getting cash out from a refinance can help.

Cons Of Getting Cash Out When Refinancing

-More money to pay back to the lender
-Higher monthly payment
-Less equity

Although getting cash out can be a great help to your finances, there are also things you need to consider when deciding if getting this money is worth it to you in the long run. Keep in mind that the more cash out you get, the more money you are going to have to pay back over the life of the loan.

Also, the more you borrow, the higher your balance, meaning the higher your monthly payment will be. Making sure your payment will still be affordable after getting cash out from your refinance is a key factor in determining if cashing out is feasible for you.

You also need to keep in mind that the more cash out you take, the less equity you will have left in your home. This means less profit in the event you want to sell the property, and less you will be able to borrow in the future should you decide to refinance again.

Taking into consideration the advantages and disadvantages of taking cash out when refinancing will be a great help in making the best decision. While there may be other less valuable pros and cons than what were discussed here, these can give you the knowledge you need to make the right choice.

Rob K. Blake, home loan expert and author, educates mortgage shoppers on finding local providers by state like Florida Mortgage Brokers and Lenders and provides reviews of national companies like Accredited Home Lenders.

Article Source:http://www.articlesbase.com/mortgage-articles/factors-in-deciding-if-you-should-take-cash-out-when-refinancing-1695677.html

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Because of the downfall of the US economy, the mortgage industry has become more rampant on the news. You can always hear something regarding foreclosures, mortgage industry, refinances, loan modifications and a lot more almost each night. And because of this, you will need to make a wise decision if you are planning to get a home loan. One of the most important decisions you have to make is to choose between a mortgage lender vs a mortgage broker. There are many people who prefer one over the other. But what can you get from each? The disadvantages and advantages of each of these options will be discussed in this article.

There are several reasons why most loans are being started by mortgage brokers nowadays. But the biggest reason is because the brokers are able to look around in order to give the consumer the best home loan available with the best lender as well. Since they are familiar with the different lenders, they can easily get the loan of the consumer to whatever lender that has the best service and interest rates. Aside from this, they are also aware that there are some areas wherein certain lenders are more strict on as compared to others. Because of this, consumers will benefit from the expertise of the broker in the end.

However, a disadvantage of choosing a broker over the lender is because there are some which are not good with the job. Aside from submitting your loan to a wrong lender, they will only waste your valuable time. Because of this, it is important for the consumer to really find a good and a trustworthy broker which is knowledgeable in the different products that are also offered by various lenders.

On the other hand, if you go directly to a lender, you will have a benefit of having your loan directly worked on by the underwriter which is the partner of your loan officer. Since the loan officer acts as a salesperson for just one mortgage company, he will be knowledgeable of the products more than the broker. This is because brokers are working for different lenders while the officer is handled by only one. Because of this, consumers can get the advantage of knowing directly the issues involved once they apply for a loan.

However, direct lenders can only provide the consumer just one set of products. If the consumer is not qualified for the products presented to him, then he might need to go elsewhere and find another mortgage lender. This can waste the valuable time of the consumer. But if the mortgage lender will pre-approve the consumer, then there is a good probability that the consumer will chose the loan which is offered by the lender.

Either option works just fine. Whether you choose a mortgage lender vs mortgage brokers, the end product will still require you to have a good lender and a good broker. This is because if you don’t, your time is wasted.

I did a little research for you. For exclusive resources, guides and information on mortgage lenders, visit the #1 mortgage resource on the net: http://www.MortgageLoans-101.com

Article Source:http://www.articlesbase.com/mortgage-articles/the-advantages-and-disadvantages-of-getting-mortgage-lender-vs-mortgage-broker-1481244.html

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If you are an average mortgage consumer, you would probably think a mortgage lender, mortgage banker, and mortgage broker are all the same thing simply because they all sell mortgages to home buyers and refinancers. However, if so, you would be wrong and this mistake could end up costing you a lot of greenbacks.

Definitions of Mortgage Companies

Let’s start by defining each specific term and then compare the differences. We will start with the term, Mortgage Banker.

Investopedia states the definition of a Mortgage Banker as:

“A company, individual or institution that originates mortgages. Mortgage bankers use their own funds, or funds borrowed from a warehouse lender, to fund mortgages. After a mortgage is originated, a mortgage banker might retain the mortgage in portfolio, or they might sell the mortgage to an investor. Additionally, after a mortgage is originated, a mortgage banker might service the mortgage, or they might sell the servicing rights to another financial institution. A mortgage banker’s primary business is to earn the fees associated with loan origination. Most mortgage bankers do not retain the mortgage in portfolio. “

An example of what I call a “pure” mortgage banker is Bank of America. As a bank, Bank of America can retail mortgages to consumers, close in their own name and fund all their loans with their own money. They don’t need a warehouse lender source…they have the cash. This is the most common version of the mortgage banker, but there is another version I call the “hybrid” mortgage banker. This type of banker differs only in size (much smaller) and the fact they use a short term line of credit from a warehouse lender to fund their loans which they close in their own name.

(Note: Remember that all mortgage bankers “close in their own name”. It becomes very important in just a minute!)

It is important to note both types of banker end up selling their closed loans to Wall Street passing the risk on the final investors.

Now let’s address the term “Mortgage Lender”. Other than the purely generic definition of “a company that lends mortgage money”, there is another more specific “industry use” definition I give you.

Inside the industry mortgage brokers refer to their wholesale lenders simply as “mortgage lenders”. So what is a wholesale lender? It is easier to understand with an example.

A good example of a wholesale lender is the old Countrywide Home Loans before they went under. Brokers all over the country used their money to fund originations and close those loans in Countrywide’s name. It was indeed Countrywide’s money used at the closing table, not the brokers.

Investopedia refers to the differences between mortgage brokers and bankers in the following way,

“The distinguishing feature between a mortgage banker and a mortgage broker is that mortgage bankers close mortgages in their own names, using their own funds, while mortgage brokers facilitate originations for other financial institutions. Mortgage brokers do not close mortgages in their own names.”

This brings us to the definition of “Mortgage Broker”. To quote Investopedia once again,

“An intermediary who brings mortgage borrowers and mortgage lenders together, but does not use its own funds to originate mortgages. A mortgage broker gathers paperwork from a borrower, and passes that paperwork along to a mortgage lender for underwriting and approval. The mortgage funds are then lent in the name of the mortgage lender.”

How These Differences Can Cost You Money

I promised you earlier a discussion of why it is important to note the “close the loan in their own name” banker difference and here it is.

This is important because a mortgage banker does not have the same disclosure rules simply because they close loans in their own name. This is a legal technicality, but it makes mortgage bankers billions of dollars without the consumer knowing….but let’s back up a minute.

Consumers should know a big chunk of the profit on any originated mortgage comes from the spread between the rate consumers pay and the rate Wall Street expects. Since both banker and broker loans end up on Wall Street, they both have this profit potential. This profit legally has two names: Service Release Premium if the loan is a banker loan or Yield Spread Premium if the loan is a broker loan. Federal law requires this profit from broker loans to be disclosed on the application documents as well as the closing documents.

However, even though this rate spread profit may be equal to or greater on a banker loan, NO consumer disclosure is required at application or closing!

In my experience, mortgage banks are not the low cost provider for retail mortgage money. They have huge over-head requirement, costly advertising campaigns and hungry stock holders all forcing their hand to maximize profit on each and every loan. With their ability to hide rate-bumped profits like service release premiums, do you really stand a chance of getting the lowest rate with a bank?

Probably not.

Does that mean a mortgage brokers automatically provide better deals?

Absolutely not!

However, if you know how to shop to spot and reduce their disclosed rate-bump profits, specifically yield spread premium, you at least have a fighting chance.

Once the budget has been set out and you are ready to move onto the next step, you can find the proper mortgage company for your needs.

Rob K. Blake, mortgage expert and author, educates mortgage shoppers on finding local providers by state like Ohio Mortgage Brokers and Lenders and provides reviews of national companies like ABN AMRO Mortgage.

Article Source:http://www.articlesbase.com/mortgage-articles/overview-of-the-differences-in-mortgage-companies-1471254.html

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Are you in need of a mortgage loan modification and have questions about loan modification companies? Let’s take a closer look at the services these companies provide and whether or not they can really help you stay in your home.

Loan modification companies have been coming out of the woodwork since the housing crisis erupted in 2007. The role of such a company is to serve as a liaison between the borrower and the lender and aid the borrower in obtaining a new set of more comfortable loan terms on a mortgage loan. The Loan Modification company should work as an advocate for the borrower. Their service is worthwhile only if they get the consumer a better deal than they could get on their own. Historically the niche has been filled by attorneys or groups of attorneys who are highly skilled and knowledgeable in the rules and regulations surrounding loan workouts. The dangerous thing about the recent proliferation of new loan modification companies is that now you have a lot of folks jumping into this industry with no prior knowledge of the subject matter – and they are learning on your dime. Even worse, there have been countless incidents of people being scammed by loan modification companies asking for large amounts of money upfront and then either disappearing entirely or claiming to be unable to modify the loan in question.

With the rollout of the federal program aimed at helping consumers modify their loans (The Making Home Affordable program), there is now a uniform set of guidelines and expectations governing loan modifications. If your lender is participating in the Making Home Affordable program then you should be able to work with them directly to get your loan modified and bypass all 3rd party loan modification companies and attorneys. Even if your lender is not participating in the federal program you should be able to work with them directly. Start by putting together a comprehensive list of your income and expenses and make sure you have a firm grasp on what size payment you can afford – once you know this number don’t settle for anything higher. When you’re ready to contact your lender you will need to speak with a loss mitigation specialist (see the list of phone numbers at the bottom of this article).

If you have tried to work directly with your lender, and are getting nowhere despite your best effort, it may be necessary to enlist the help of an attorney or loan modification company. You need to proceed with the understanding that a lot of people have been scammed by loan modification companies and you will have to be extremely careful when choosing your service provider. The ideal scenario is to use an attorney or group of attorneys who have been in the loan modification industry for many years. Avoid using a firm that has been in the industry for less than 2-3 years. As stated earlier, it is largely the new entrants into this field that have been causing problems. That’s not to say that all new loan modification companies are bad – it’s just a much safer bet to go with a company that was in the business long before the recent housing crisis. Choosing a firm that has been around for a long time does not ensure that you won’t get taken for a ride. You will need to ask for references of satisfied clients that you can contact. You should also avoid all but the most basic upfront fees. There are plenty of companies that will be content to get paid the majority of their money after your loan is successfully modified.

Another point to consider is that a skilled and reputable attorney or loan modification company may be able to get you a better deal on your loan modification than what you can get on your own. If you have tried dealing with your lender directly and are not able to come up with new loan terms that are comfortable then you should seek help. Remember, it will almost always cost your lender far less to modify your loan than it will cost to foreclose on it. It is in their best interest to keep you in your home. With home prices plummeting and homes sitting on the market for months and months – your lender is not interested in owning your home. Loan modification can be a win for both the consumer and lender in a lot of cases.

Are you ready to start the loan modification process? Here are the numbers for the loss mitigation departments that handle loan modification services for several of the nation’s largest lenders:

Mortgage Company Contact Info Ameriquest (800)-211-6926

Bank of America (800)-846-2222

Chase Mortgage (877)-838-1882 ext. 52195

Countrywide (800)-262-4218

Ditech (800)-852-0656

Fifth Third Bank (800)-375-1745 option 3

GMAC Mortgage (800)-850-4622

HSBC Mortgage (800)-338-6441

Indymac Bank (877)-736-5556

WAMU (866)-WAMU-YES

Wells Fargo (877)-216-8448

For more information regarding loan modification and many other personal finance topics, please visit our web site at consumer finance report. We feature a large and constantly growing article library covering a wide range of consumer finance issues. Our unique, proprietary content is specifically designed to inform, educate, and provide guidance to consumers facing financial problems.

Article Source:http://www.articlesbase.com/mortgage-articles/questions-about-loan-modification-companies-1470251.html

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