In the world of real estate, you will find some very dishonest lenders that are willing to take advantage of your desire for cash and in the end scam you out of your equity. Here are some scans to look out for.
Equity stripping is when a lender can get you a home equity loan, even though your monthly income is not enough for the payments. These lenders encourage you to apply anyway, and should you default on payments, they get to foreclose and take your home and strip you of your equity.
Another one is loan scamming. This is when a lender encourages you to refinance your loan. When doing this, the lender charges high fees. The more you flip a loan, the more your debt increases and soon your can become in over your head and most likely loose your house.
Credit insurance packing is another scam. Once a home equity loan has been agreed on, a lender can give you papers to sign that include “charges” for credit insurance that you never asked for. The lender essentially hopes you will no notice and sign anyway. If you do notice, a lender could use scare tactics and tell you that should you not agree to these terms, the loan will have to be re-written and a delay in your application.
Deceptive loan servicing is a scam in which the loan service fails to provide you with an accurate or complete account statements and payoff figures. This makes is pretty much impossible to figure out how much you have paid off or still owe. The service may even tack on late fees or legal fees you don’t understand. This way you are confused, and have more to pay than you should.
Signing over the deed is one more scam. If you are having trouble paying your mortgage, the lender can threaten to foreclose the house. The lender can offer you a new way to finance, and in the meantime really be asking for the deed to your property. Once the lender has the deed, he can treat it as his on property.
There are many reasons why homeowners decide to refinance. This is a new opportunity to obtain a lower interest rate, shorten their mortgage term or convert to a fixed rate mortgage. One of the best reasons to refinance is to lower your interest rate. This can help you save money and increases the rate at which you build equity in your home. This can also, and importantly, decrease the size of your monthly payment.
It is also a good idea to determine whether it is better to have an adjustable rate or fixed rate mortgage and convert between the two. Sometimes adjustments in fixed rate mortgages can occur and this results in rate increases that are higher than the rate available through a fixed mortgage. When this happens, it may be better to concert to a fixed mortgage so the interest rate will be lower. On the other hand, converting from a fixed rate loan to an adjustable rate can also be a food strategy especially in the falling interest rate environment. This is especially a good idea for homeowners who don’t plan on staying in their home for more than a few years.
It is important to do your homework and research when considering refinancing your home. If you are not careful, you can end up with never ending debt. Some people do this in order to cover bigger expenses such as home remodeling or a child’s college education. Another reason is that the interest on mortgages is tax deductible. Just keep in mind that increasing the number of years that you own on your mortgage s rarely a smart financial decision and neither is spending a dollar on interest to save 30 cents.
Many homeowners also refinance in order to consolidate their debt. Doing this does not automatically bring great savings. Many people who had high interest debt on credit cars or other purchases more than likely will just end up doing it again and be in the same situation as before.
Refinancing can be a great financial move as it can reduce your mortgage payments and shortens your loan term. However, it can quickly backfire if your are unprepared or not ready. Make sure you are serious and are ready to do your financial homework.
If you are hoping to buy a foreclosure, especially in the hopes of either saving money or making a profit, there are some things you need to take into consideration first. Tip number one, don’ make lowball offers on just listed properties! Most banks are not going to accept this offer, as they have just been on the market and want to ensure they get a good deal for their house. Normally banks consider lowering the price if the house has been on the market for 90 days with out an offer.
Another good tip to keep in mind is to not get into bidding wars! Sometimes agents will list a house for a very low price in order to grab people’s attention and then the bidding war commences between all the interested buyers. Do not fall for this! Make sure to do some research and find out how much the house is actually worth.
Research is most important, always make sure to do it!! When wanting to buy a foreclosure, you need to act fast. The house of your dreams maybe snatched up very quickly before you even have a chance to act. This is why you need to already make sure you know what you want and can afford, and once you see something you like, act on it quickly.
The best way to make an offer on a foreclosure is to buy it with cash. This may not be always possible for some people, so it is best to make a backup plan in case you really want a house. It is always possible to borrow from relatives and then secure a mortgage after the deal is closed. This way, you can ensure you get the house as transactions tend to go more quickly when a buyer pays cash.
When making an offer on a foreclosure, keep in mind what the bank wants. Banks like quick and simple deals. If you have a bigger down payment and deposit, this makes you seem like a strong candidate. This also makes you seem more committed and will have no trouble actually closing on the deal. This will make you look more attractive and a bank will choose you over other potential buyers because of this. Just keep these tips in mind, and this will help you secure a foreclosure!
Buying a house is obviously a stressful process, so learning the best way to qualify for a mortgage loan now will help you later down the road!
The best way to start is to know you credit score. It only takes a few minutes to do so and is quite an easy process. Some homeowners never end up doing this and then only realize their score is too low when they are already rejected for a loan. If your score is below 680, lenders are allowed to deny your request, so make sure you know what your score is before applying!
Make sure to save up your cash. Many Mortgage lenders require a down payment, so if you are unable to fork up any cash, be prepared to be rejected! Each down payment differs depending on the type of loan and lender you are working with. Keep in mind that this is not the only expensive you will need to be able to cover. There are also closing costs, home inspections, appraisals, title searched, and application fees to cover as well!
Also make sure to not quite your job during this process! This is a crucial step, because any changes to your employment or income can delay or even stop your mortgage approval process!
Another good tip is to start paying down your debt and avoid stacking up any additional debt. Before being approved for a mortgage, lenders evaluate your debt to income ration, so if you have alot of debt, you can be denied for a lower mortgage or denied all together! Don’t let your guard down once you are approved, lenders will re-check your credit before closing as well.
Getting pre-approved for a mortgage loan is a very responsible choice. This way you know what you can and cannot afford before you start looking. All you need to do is contact a mortgage lender and submit your financial and personal information and wait for a response. This way, you know what your budget will be. By following these simple steps, you can make the house buying process slightly less stressful!