January 29, 2014

Consequences for Overpricing Your Home Blog

The busy spring market is quickly approaching and some of you may be sellers preparing to put your home on the market.  One of the most important decisions you will have to make is deciding on the asking price.  Should you choose to “push the market,” your home could end up sitting for months, resulting in the selling process costing you more than you anticipate.  US Mortgage has come up with some pitfalls to avoid when listing your home.

Time on the market – Overpriced homes could potentially sit on the market for months and essentially become “stale listings.”  Buyers then begin to question this property: “Why has this been on the market for so long?” “Is there something wrong with the listing?” “Is there something that I don’t know or am missing about this home?”  These questions will stick in the buyers’ minds and could lead them to walk away from the property or lowball their offers.  Neither of these scenarios benefits the seller.
  Price High, Reduce Later” -   Be careful when thinking that you can always reduce the price at a later date.  Once you put your home on the market, the greatest potential for traffic is in the first 30-45 days.  By pricing high with the intention of dropping the price later, you risk losing a lot of potential buyers.
  Lower Proceeds – Unfortunately, when a home is overpriced when initially listed, it almost always is guaranteed to sell for less than market value.  What ends up happening is the seller has fewer buyers to choose from, zero control because of the time spent on the market, too high an asking price, and costs to incur to maintain the property.  Because of all of these negative circumstances, the seller will get the least from their investment rather than the most.
  Helping your Competition – Why would you want to make your neighbor’s property look like a better deal than yours?  An overpriced home can actually help your competitors, so it is imperative to scan the neighboring inventory before listing your home.  If you are pricing higher than what is available around the block, make sure that your property offers assets that justify this increase. 

Remember, making the choice to overprice your listing can prove to be a timely and costly risk for the seller.  

SOURCED: Epoch Times

July 29, 2013

Refinance your Mortgage with Bad Credit Score

Refinancing your home may still be possible with a poor credit score, while you most likely won’t qualify for the lowest interest rate available.  Therefore, the main question is can you still refinance on terms that make it worth your time?

Before you begin shopping for rates, start by cleaning up your credit.  Begin a history of paying all of your bills on time, try even making more than the minimum payments on your current debt, paying off credit cards, and limit your spending while avoiding the establishment of new credit lines that can improve your credit score shockingly fast.

Your credit score can also quickly be improved by confirming there are not any errors on your report.  Furthermore, decreasing your debt-to-income ratio will help your standing among lenders.  The total of the monthly mortgage expenses, including payments, taxes, and insurance, as well as any other monthly debt payments, such as auto payments and credit cards, should not surpass 43% of your gross income.

Naturally, having a stable income history, having liquid assets which illustrate your ability to make multiple payments on the loan, and by having established equity in your property as increase your odds of qualifying for a respectable rate.

Keep in mind, 20% down payment is always required to avoid private mortgage insurance (PMI).  Also, PMI will most likely cost you between $50 and $200 per month, according to the balance of your loan and PMI rate.

By taking these steps will help maximize your chances of qualifying for a beneficial rate.
Moreover, a hidden advantage you should explore would be government programs, for instance Home Affordable Refinance Program (HARP) and Home Affordable Modification Program (HAMP).  These programs are free and are designed to help lower the interest rates and your monthly payments. 
Government aid programs have been since extended.  But you should take advantage of this option because they will all expire December 31, 2013.

Speak with a Mortgage Specialist to discuss any questions
Contact US Mortgage Corporation toll free: 1-800-562-6715
www.usmortgage.com  |  info@usmortgage.com

Source: Lender411.com

January 30, 2013

Making the choice between mortgage brokers and mortgage banks

Most of the real estate buyers face problems deciding on whether to resort to the mortgage brokers or the mortgage banks. It’s very obvious that they are on the lookout for the best deal that they can get, but choosing the right way often takes the better of them in the same way as mortgage refinancing does. It’s important to understand the difference between the mortgage brokers and mortgage banks before you choose any one of them for the fulfillment of your purpose.

Who are mortgage brokers?
If you've heard of freelancing agents, you probably have an idea of what mortgage brokers basically do. They act as a link between the lenders and borrowers. They are responsible for finding the lenders some good borrowers and earn commission from the lenders in exchange. Being freelancing agents, mortgage brokers are pretty much independent. They work alone. They have several sources of contacts, which makes it easier for them to carry on with their jobs as brokers. Mortgage brokers follow a particular routine as they work on finding data for borrowers. It’s important that you let them know your plans well so that they can get you the approval as well as make sure you have the mortgage that suits your situation best.
Opinions vary with people with many preferring the services of mortgage brokers. They believe that going to banks isn't going to bring mortgages as good as the ones they can get through mortgage brokers. Mortgage brokers are spoken highly of by people as many are known to have made the approval of applications possible despite bad and fallen credit histories.

Pros and cons of Mortgage Brokers
It’s better to know the pros and cons of mortgage brokers before you decide on appointing any one of them for your purposes.
·   Your choice of time – With mortgage brokers, you get the flexibility of setting up appointments at your own time.
·   Competitive rates – The rates are very competitive in the sense that they can save a lot of your hard-earned bucks.
·   Find lenders when you need them – Mortgage brokers are known to find lenders for you even when your credit history has a lot to speak against you.
·   Carry out negotiations – Mortgage brokers take up the negotiation job with much pleasure to make sure the mortgage payments are never too heavy.
·   Offshore and small lenders – Lenders offering good rates are either based outside the country or small enough.
·   Lack of responsibility – It is really a matter of concern that mortgage brokers don’t care if or not people can handle the mortgages that they are borrowing as higher mortgages would mean better commissions for the brokers.
·   No Supervision – You wouldn't find anyone to let your problems know in case the mortgage borrower isn’t working up to your expectations.

Mortgage banks
The loan officers at the banks are somewhat mortgage brokers with the only difference that they work for the banks. They do the same things regarding consulting and helping you decide on the mortgage that suits you the best. They don’t work independently and are paid by the banks.

Pros and cons of Mortgage Banks
The following pros and cons will help you decide if you can go for the mortgage banks to get your mortgages:
·   Appointment times are flexible.
·   Perks and waivers on appraisal fees available.
·   Security
·   Lower costs.
·   You’ve to work out the negotiation all by yourself.
·   Shopping around is necessary.
·   Not better than rates offered by mortgage brokers.
·   Credit scores are paid importance to.

Now that you have learned and understood the pros and cons of both mortgage brokers and mortgage banks, it won’t be difficult for you to make your choice. It all depends on how well you can negotiate and the benefits that you’re looking for as you go ahead with your mortgage.

Author Bio:  Stephenie Miller is a prolific writer with specialization on various aspects of finance. Her articles on debt, mortgage industry, refinance, real estate and personal finance are valuable guidelines to the readers.

December 5, 2012

Which is the best time to Refinance your home

Which is the best time to refinance your home?
The best time for the owner of a property to get the home loan refinanced is, when the interest rates on the mortgages are low. Homeowners opt for refinancing, when they start to face problems in managing the mortgage payments. Another situation under which homeowners may opt for mortgage refinancing is, when they want to save money on the mortgage payments. Refinancing is the process in which you will be required to take out a new home loan, so as to get the terms and conditions of the loan changed. However, the criteria for you to obtain a refinance are same as that of taking out any other types of loans.

Determining the right time:
There are various situations under which you may be required to refinance your home loan. If you fear that you are going to default on the home loan payments, you may better opt for refinancing. As the terms and conditions of your loan get changed with refinancing, it becomes easier for you to pay down the mortgage. This again helps you to retain your home.
The main idea associated with refinancing is that it helps in lowering the interest rate and may also help by lengthening the loan term. Thus, the amount which you will be required to pay each month in installment, is suspposed to be much lower than what you were required to pay previously. Therefore, it becomes easier for you to make the home loan payments.

However still, the right time for you to refinance your home is when the mortgage market has various offers, and the interest rates are considerably low. In addition, it is also important for you to have a good credit score so you can refinance your mortgage at a lower interest rate.  For, even if the interest rate in the mortgage market is low, it may not be possible for you to get a good offer, if you have bad credit rating.

Other than the above if you think that the value of your home has risen quite a bit, you must have quite a large amount of equity in your home. So, this can be considered to be one of the best times for you to get your home refinanced: Refinancing your home is an option which can also be used for consolidating your debts or making the required home improvements.

Another option or the best time is, when you are seeing improvements in the source of your income. So, if you have been able to pay off all of the other debts, like that of the credit card debts or the student loans and any other such debts, you will see that the debt to income ratio has lowered quite a lot. If you have a low debt to income ratio, it may be possible for you to get a refinance mortgage for quite a low interest rate. Moreover, if the interest rates on the mortgages are low, you may be able to get the best of the offers.

Furthermore, if you would want to change the type of the home loan from affixed rate mortgage to an adjustable rate mortgage or vice versa, then too, you can opt for the mortgage refinance.
Author bio- Stephenie Miller is a prolific writer with specialization on various aspects of finance. Her articles on debt, mortgage industry,refinance, real estate and personal finance are valuable guidelines to the readers.

Speak with a Mortgage Specialist to discuss any questions
Contact US Mortgage Corporation toll free: 1-800-562-6715

December 4, 2012

Financing for a Home Foreclosure Purchase

With so many foreclosed properties on the market these days, there are some real opportunities for careful buyers looking for a home or an investment property. But how can you arrange the financing?
When buying a foreclosed property, you can often finance it with a mortgage, the same as a conventional transaction. But that isn't always the case.  The best deals usually go to buyers who can put up cash. If you are planning to finance, there are some special programs for both investors and buyers seeking a home for their own use that are worth knowing about.

Distressed properties make up a big chunk of the residential real estate market these days. According to the National Association of Realtors, 29 percent of all previously owned homes sold in February of this year were either foreclosures or short sales, mostly the former. Nearly one-third of all home sales were cash, suggesting that a big chunk of the market is getting snapped up by investors.

The best deals on foreclosed properties are at a sheriff’s auction, which is the first opportunity to buy them once they've been repossessed. However, sheriff’s auctions don’t offer opportunities to arrange financing – you have to pay cash up front. Sheriff’s auctions can also be risky for inexperienced buyers – for example, there’s little opportunity to inspect the property beforehand, so you can’t be sure what you’re getting. You may also find there are issues with liens on the property as well.

There are some investors who will offer private loans, known as hard money loans, for the purpose of purchasing foreclosures at a sheriff's auction, but they will typically look for borrowers who have some experience at this sort of thing.

That being said, there are other opportunities to buy distressed properties that allow you to arrange financing. The main one is on real estate owned properties (REOs), which are homes the bank retained after the sheriff’s sale. These are put on the market much the same as other homes, and you can obtain a standard mortgage for them. You also have the opportunity to inspect the property before purchasing.

There are some special types of financing available for foreclosed homes offered as REOs. Fannie Mae’s HomePath program offers financing on Fannie Mae-held REOs with down payments of as little as 3 percent, no mortgage insurance and no lender-required appraisal. In addition, you can borrow up to $35,000 for repairs and renovations as part of the purchase mortgage. The HomePath program is available to both investors and persons seeking to buy a home for use as a residence.

Freddie Mac's REO program, called HomeSteps, lists foreclosed properties that are available for purchase but does not provide special financing for them.

A similar program is offered by the VA for foreclosed properties it has acquired. VA Vendee Financing is available to both veterans and non-veterans and, like a standard VA mortgage, allows purchases with no down payment required for owner-occupants. Investors can put down as little as 5 percent and multiple investment purchases are allowed.

VA mortgages are also assumable, meaning a new buyer can take over a mortgage held by the previous owner. This can offer a way to get a good deal on a home that is in foreclosure, but has not yet been repossessed, by taking over the current owner's remaining mortgage debt.

The FHA does not have any special financing for its REO properties, called HUD Homes (HUD stands for the Department of Housing and Urban Development, which the FHA is part of). However, you can use a regular FHA mortgage, which allows down payments of as little as 3.5 percent, to buy a HUD home. For fixer-uppers, the FHA’s 203(k) loan program allows you to borrow additional money for renovations and repairs, up to 110 percent of the property’s projected post-improvement value.

FHA mortgages are limited to owner-occupants, but there is an opportunity for investors to purchase and rehabilitate multiunit properties of up to four units, provided that one unit is used as the borrower’s primary residence.

One other opportunity for financing the purchase of a home in foreclosure is to contact the current property owner and try to arrange a sale before the foreclosure is finalized. Called a short sale, this allows the owner to walk away from the property with no further damage to their credit and lets the bank avoid the costs associated with repossessing the property.

You can often get a better price than on an REO, although negotiating a price the bank will accept can be a drawn-out process. Even so, short sales are increasingly common and currently account for over one-third of all distressed property sales.

A short sale purchase can be financed with a regular mortgage, the same as other home purchases. However, realize that with the length of time it can take to close a short sale – often several months – you probably won’t be able to lock in an interest rate for the whole time. Also, remember that you don’t have to get your financing from the same lender that holds the current mortgage on the property – in fact, you may find it advantageous to go with a lender who is not involved in the sale itself.

Speak with a Mortgage Specialist to discuss any questions
Contact US Mortgage Corporation toll free: 1-800-562-6715

November 27, 2012

Buying a Home for the Holidays?

Been thinking about buying a home? Well, maybe you should put it on your holiday shopping list this year.

Although the holidays tend to be an off-season for the real estate and mortgage industries, there are some good reasons to buy a home toward the end of the year. Although if you’re going to do it, you need to get started now.

For one thing, the fact that the holiday season is a slow one for the housing market works in your favor. There are fewer people shopping for a home at that time, so you have less competition bidding for the good properties.

The asking price on some homes may have been reduced in price after they did not sell during the busier fall and late summer seasons. In fact, home prices are typically at their lowest of the year in December, although broader trends must still be taken into account.

People showing their homes at that time of year are often hopeful of getting a sale nailed down by year’s end, so they may be more amenable to negotiation. The fact that it’s the holiday season also tends to put people in a more generous mood as well.

It’s also a slow time for real estate agents, who may be keen for any business they can find and more available to focus on you as a customer. The fact that business is slow for both real estate agents and mortgage lenders during the holiday season often means you can get your transactions processed more quickly than at other times of year, because they’ve got fewer deals to handle.

Lenders may also be more willing to shave a few points off mortgage offer in order to make a deal, both because business is slow and also because they may want to get the loan on their books before year’s end.
Tax considerations

Closing on a home before the end of the year also means you can deduct certain settlement costs on your taxes for that year. These include any pro-rated property taxes and prepaid mortgageinterest paid at closing. Since discount points are a form of prepaid interest, you can deduct those as well for the year in which you bought the home, but only on a home purchase mortgage – tax deductions for points paid for refinancing a mortgage must be amortized over the life of the loan.

This brings up a potential downside to buying a home late in the year, which you also need to be aware of. For many homeowners, mortgage interest is what allows them to itemize deductions on their tax returns, rather than just paying the standard deduction. This means they can start including smaller deductions they may not have been able to get credit for in the past, such as for certain work-related expenses, home improvements or charitable donations.

However, if you’re not itemizing deductions already, buying a home late in the year may mean that you won’t pay enough in interest to be able to itemize deductions on your next tax return – including those other settlement costs you otherwise might have been able to deduct. Remember, if your total deductions don’t add up to at least your standard deduction ($5,950 for a single taxpayer, $8,700 for a head of household or $11,900 for a couple filing jointly for 2012), it’s not worth itemizing.

There can also be a few other downsides to buying a home over the holidays. Real estate agents may be on vacation, since it’s already a slow time for them. There may be fewer open houses where you can visit homes for sale. Your own schedule may be crowded with your own holiday preparations and activities.

That being said, there are still some pretty good deals to be had by buying a home over the holidays. If the timing works for you, a new home can make a very nice holiday present for you and your family.