As if facing foreclosure wasn’t bad enough, now you have to be on the lookout for foreclosure rescue scams. In these scams, companies claim they can help save your home by working out a deal with your mortgage loan. The scams often require upfront payments. In the end, you’re out of hundreds of dollars and still facing foreclosure of your mortgage loan.

Sometimes foreclosure rescue scams come to you after a foreclosure notice is posted at your county or city courthouse. Other scams are advertised on television, radio, and the internet.

You can tell whether a foreclosure rescue service is a scam by looking for certain warning signs:

• The company asks you to pay a fee before they do anything or asks you to send a fee via cashier’s check or wire transfer.
• The company tells you to pay them instead of your lender. Foreclosure scam artists often tell homeowners not to contact their lender at all.
• The company promises it will stop the foreclosure process. Your lender is the only one who can stop your property from being foreclosed. Foreclosure rescue companies can’t guarantee your home won’t be foreclosed.
• The company asks you to transfer your title or deed. Continue reading →

If you ever try to refinance your home, your process might come to a halt when you find out your current mortgage loan has a prepayment penalty. Lenders often put the prepayment penalty clause in a mortgage contract to keep buyers from selling their home or paying off their mortgages within a certain period of time. Some borrowers who have credit problems can’t get mortgage approval without the prepayment penalty clause. Other borrowers with better credit scores agree to the penalty because the lender promises a lower interest rate.

Prepayment penalties usually apply for the first three to five years of the mortgage. The penalty may be a percentage of the total mortgage amount, e.g. 2%. Or, the penalty could be several months of interest payments. Either way, prepayment penalties can amount to thousands of dollars. If you’re refinancing to get a lower interest rate, the prepayment penalty could negate the interest savings you’d receive. Continue reading →

Mortgage loans at one time were relatively easy to get and lenders were pretty lax in their requirements for approving a mortgage loan. However, while the past policies did grant many buyers the America Dream of owning a home, it eventually backfired and caused a financial crisis in the mortgage industry. Now lenders are taking loan application approvals much more seriously and have stringent requirements for mortgage loan eligibility.

Is Bad Credit a Deal Breaker?

When you apply for a loan, you should already know where you stand credit-wise. If you have excellent credit scores ranging above 700, you are more likely to have the most options when it comes to finding a loan and a great interest rate. Lenders want to find applicants who show responsibility when it comes to managing their money and their financial obligations. Continue reading →

If you took on an adjustable-rate mortgage (ARM) a few years ago, you might have done so with the expectation that you would refinance once the interest rate started increasing. Now, you’re probably wondering whether refinancing is the best option.

Refinance Qualifications

Refinancing your mortgage loan generally only makes sense when you can get a better interest rate than your current one or when you can switch from an adjustable interest rate to a fixed rate.

These days, it’s harder to get a great mortgage interest rate. To get the best rates, you need a FICO above 720, at least 20% equity in your home (that hasn’t been used to secure a second mortgage or home equity loan), and two years of steady income. Without all three of those things, you may not get the best rate or you may be denied a refinance all together. Continue reading →

In recent times much has changed about the financial industry, among lenders, and with mortgages. These changes have been made to combat the high rate of mortgage defaults that wrecked the housing and mortgage industries not so long ago. So many homebuyers were given mortgage loans on homes they could not reasonably afford, leading to a nationwide crisis.

Since the storm has finally began calming down, lenders are now much more demanding of borrowers than in the past. Steps are being taken to ensure the borrower is creditworthy and capable of paying off their debts and it is harder to get a mortgage loan than ever before. With credit scores much lower across the board than before, it is not easy to finance a home if you do not have all your finances in order. Continue reading →

One of the biggest benefits of owning a home and having a mortgage loan is having an extra tax deduction. The tax rules in the United States allow homeowners to deduct all mortgage interest paid on federal taxes. This means you can reduce the amount of taxes you have to pay to the government.

Requirements

To deduct mortgage interest on your federal taxes, you must meet certain requirements that have been defined by the Internal Revenue Service (IRS).

You must file Form 1040 and itemize your deductions. You can’t claim mortgage interest taxes if you use any other form.

It must be your mortgage loan. You can’t take the mortgage interest deduction if you’re making payments on a loan that belongs to someone else. (Be careful paying someone else’s mortgage – you may owe gift taxes.)

The mortgage interest must have been paid on a qualified home. Qualified homes include your primary home and a single second home that is not rented out. If you have a second home that’s been rented out, you can deduct the mortgage interest if you used the home more than 14 days. Continue reading →

For some potential homebuyers who work in specific job positions, there are options for finding low-interest or special assistance when it comes to obtaining a mortgage loan. Not all mortgage loans are generated by traditional bankers because not all borrowers fit the same financial profile.

If you work in a profession that offers special assistance or programs for getting a mortgage loan, it is worth the effort to find out more before loan shopping using traditional means.

Some examples of professions that might offer mortgage loan discounts include:

• Firefighters
• Nurses
• Police
• Professors
• Public service careers
• State Employees
• Teachers Continue reading →

When it comes to mortgage loans, there are two primary kinds – adjustable-rate mortgages (ARMs) and fixed-rate mortgages (FRMs). The “adjustable” and “fixed” parts of the mortgages refer to the interest rate. As the name suggests, an adjustable-rate mortgage has an interest rate that can fluctuate over the life of the loan. On the other hand, a fixed-rate mortgage’s interest rate doesn’t change during the loan.

Fixed-Rate Mortgages

While there are fixed-rate mortgages that have the same or “level” payments throughout the loan, there are also some with payments that increase or decrease over the years. Mortgage payment is split between interest on the loan and the cost of the home, or principal. In the first years of a fixed-rate mortgage, most of the monthly mortgage payment goes toward the interest. As the years pass, more of the payment goes toward principal and less toward the interest. Continue reading →

Some external resources which offer good information related to mortgages, secured loans, unsecured loans and other personal finance related subjects.

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