zoe1594 asked:


My husband and I are in the process of buying our first home. We got a great deal on the house at 1/2 the appraised value. How long do we have to own the house before we can take out a home equity loan on the home. We want the money to fix up some things in the house. Thanks!

David Siegel asked:


In recent months, the amount of foreclosures filed throughout the country has more than doubled from the same time period last year. The reasons for such high percentage of filings are numerous. Primarily, the sub-prime mortgages have landed in the hands of individuals who most likely did not qualify for convention financing. Thus, the interest rates on the loans remain higher than other conforming loans. Additionally, many of the sub-prime loan products involved adjustable rates (ARMS) which typically re-set within the first few years of the loans inception.

As sub-prime loans relate to Chapter 13, the typical scenario is as follows: The homeowner qualifies for the loan without a substantial down payment and without significant income documentation. The monthly payment is a stretch for the homeowner; however, it is temporarily manageable. Depending upon the type of ARM, the loan may reset in one, two or three years. It is at that point in time that the homeowner may not be able to make the new, higher mortgage payment. The homeowner is also unable to refinance the debt on the property since the type of loan products needed to accomplish that task no longer exists. Thus, the homeowner is in quite a tough situation. The current real estate market would make it nearly impossible for the homeowner to sell the property and pay off the mortgage. Chapter 13, known as the home saver case, would not be practicable in the case of adjusting ARMS.

The idea behind Chapter 13 bankruptcy is to allow a homeowner to catch-up on whatever mortgage arrears have arisen in addition to making the current mortgage payment on time. As rates adjust and loans reset, the homeowner simply cannot make the current mortgage payment, let alone a partial payment to catch-up. The situation is basically a doomsday for both the homeowner and the mortgage company. The homeowner was banking on the ability to make the payments and/or refinance the outstanding debt at a later date. The lack of real estate appreciation has led to the inability on the part of the homeowner to do just that.

What we are likely to see is a large number of homes on the market for sale. Many of the borrowers will file for Chapter 7 bankruptcy and not Chapter 13 bankruptcy. I believe that the market will take five to seven years to begin to show some signs of appreciation. It will be interesting to see if Congress amends the bankruptcy code to allow mortgage debts to be adjusted. If not permanently, then for a short time frame of three to five years.



Halogen Track Lighting

DavidB asked:


Many people do not realize that a home equity loan is available to many homeowners. However, some take advantage of them and get one whenever they can qualify. It just really all depends on your home and the equity in it as to whether or not you may or may not qualify for one. There are many places that offer loans against the equity in your home, and you may or not be aware of them.

Why you should get a Home Equity Loan?

There are so many reasons that you might want to take out a home equity loan. Maybe you need to do some home improvements around the house. On the other hand, perhaps you are ready to take that dream vacation that you have worked so hard for. Another reason that many take out a loan against the equity in their home is for debt consolidation. You will find that this is the most popular reason for this type of loan. Simply to be debt free. Taking out a loan and paying off your debt, so that you only have one single payment that is lower to pay every month is a great reason in itself.

Where can I get a loan against the equity of my home?

Most banks or mortgage companies that offer second mortgages are known for home equity loans. Many of them will be willing to look at your information to in return give you the most for your equity that you have built up in your home.

How much will my loan be?

If you are like everyone else, chances are that you are wondering just how much of a loan you can get against the equity of your home. Well, that really all depends on the equity that you have built up in your home and how much of a loan you need. Maybe you do not need the full amount that you are offered, or perhaps you need a little more. Like stated earlier, this depends on the amount of equity as to how large or small the loan will be.

Something to Keep in Mind

If you just bought your home, and you have not made many payments on it yet, then chances are you will not qualify for a loan against the equity in your home. The reason for this is you have to make payments for a while and give the equity a chance to build up. You cannot go and get a loan against the equity in the same day or month you start paying on your home. Simply because there is, no equity built up at that time. You should at least pay on your home for a few years before you try to qualify for this type of loan.

As you can see, the home equity loan is one that can help you out if you were to get in a bind. You can get one to consolidate your debt, or to just help financially.

Veronica Key asked:


With all of the talk in the news lately about the decline of the United States economy and the real estate market many have been hearing the term “sub-prime mortgage.   But what is a sub-prime mortgage? And considering all of the negatives associated with such a mortgage product are there any benefits for someone to seek out and obtain a sub-prime mortgage?

A sub-prime mortgage is a loan to a borrower with less than perfect credit. This can happen to the borrower for many different reasons that put them in the position of needing a mortgage loan they may not otherwise be able to get.

A sub-prime borrower has either missed payments or been late on them. This forces the lender to view them as a higher risk on a new loan. They recognize they may have higher costs associated with this type of borrower so they charge a higher rate to compensate for potential losses.

Sub-prime loans can be structured in various ways. The most common loan of this type is the ARM loan. An adjustable rate mortgage can appear to the borrower as though they are getting a favorable rate at first when in reality it only starts out that way.

The major problem with this is when the loan adjusts to a higher rate many of the borrowers cannot make the payments, which causes their home to go into foreclosure. This only leads to more bad credit and financial problems for them.

Today you hear about the high foreclosure rates in America and much of it goes back to sub-prime loans. It reality the lender is partly to blame and some of them have been hit so hard they are going into bankruptcy themselves. These are usually smaller lending institutions that are having a hard time weathering the storm, however even the largest of lenders are hurting from all these bad loans.

It does not have to be all bad however. There are many benefits to both the borrower and lender on sub-prime mortgages. First of all this gives the borrower a chance to improve their credit score by making the payments on time. This can lead to you being able to qualify for a better interest rate which can be done by refinancing the sub-prime loan.

It can be good for people who have run into some bad luck financially. Things like job loss or divorce can really hurt a person’s credit, so can an unforeseen tragedy such as an illness or disaster caused by a storm. A sub-prime loan can help these people get back on their feet as well.

From the lenders point of view they charge high rates and can make high profits when sub-prime loans work out. This allows them to be part of helping a person get a new home they may not have been able to get and making a profit as well.

Hopefully this will answer your question on what a sub-prime mortgage is and if it applies to you will give you confidence to go in and apply for one yourself.



Bamboo Flooring Installation

Kristen A asked:


We are married in our 40’s with a baby. I am stay at home mom and my husband was laid off. We have two homes and no debt aside from mortgages. Should we use our home equity or cash in retirement to make ends meet until we have another income?

Rebecca

upsucker asked:


Apparently the liberals have figured out how the free market works. If you get banks to lend people money to buy houses they can’t afford, these houses get built, then after the foreclosures start, the market is flooded with empty houses. The law of supply and demand requires that they be sold at a lower price, which brings down the cost of housing for everyone.

Wagner Paint Sprayers

web_trace asked:


I always hear the economy sank once people defaulted on their home loans and that they would have never qualified for a loan in the first place had it not been for sub prime business.

So who supported giving sub prime home loans, and aren’t they to blame for the tanking economy?

Learn The Basics Of Painting

VH asked:


We just purchased a home and want to consolidate some bills to create a better cash flow. The problem is we’ve only been in the house for two months. I’m being told that most companies require 6 months to 12 months seasoning to get a home equity loan. Any suggestions?

Jack

ken asked:


I here countrywide was a large player. Would anyone help me to understand what went awry with moprtage industry? Thanks a lot.

Designer Scented Candles

Greg Ellingson asked:


Although the economic outlook is not too bright for Americans with increasing gas prices affecting almost everything we travel in, use for warmth and feed ourselves with, nevertheless there are a few slivers of sunshine in the gray clouds.

There has been some recognition from the IRS that perhaps home owners in debt and foreclosures and short sales may not be entirely to blame.

Yes, it is easy to sit smugly on the sidelines and say things like ‘over-mortgaged’ or ‘irresponsible’ but it is a fact that we do tend to think that the laws of the land protect us to some extent. Now they will, but there are many suffering people out there who were scapegoats before the Government stepped in.

Because many homeowners took on big, complicated mortgages that became too expensive once the rates adjusted, the Government has finally attempted to legislate some rules about lending. It is too tempting to think that you can finally afford your own home, and of course understandably, many people could not resist.

There are still alternatives to foreclosure: A short sale or loan modification may help many of these people resolve their problems or even hang on to their homes. A couple of agencies have been set up to try and side step another wave of foreclosures, one is called Hopenow (it is on the net)and another one HUD, though this latter one is less successful at the moment.

If you are struggling with a sub prime mortgage, take the trouble and afford the expense to send your application for consideration by recorded delivery, special mail or registered post. So far 45,000 applications have been taken, and you may want to show that you have in fact, tried to access this Government approved help. You will need proof.

Refinanced mortgages with fixed rates are available now for homeowners struggling with sub-prime mortgages. Knowing that these mortgage holders could face even more increases in their mortgages in the next two years Hopenow are looking at the most serious cases, as their mandate is to avoid as many foreclosures as possible.

One thing is certain, because of this dire and much publicized situation, most new borrowers will now exercise more caution. They now realize that they need to read their loan documents and understand how much their monthly payments might increase in future years - without any pattern that is predictable.

Meanwhile the IRS is interested in giving these distressed homeowners a break on their next year’s tax return. They will be allowed to exclude some forgiven mortgage debt from ordinary taxable income.

That’s good public policy and should offer some people welcome relief from an onerous tax burden.

For those home owners who still want to hang onto their houses, and are working extra jobs to do so, be assured that the real estate market will likely bounce back. People always have to move to new jobs, get divorced, have a baby that needs a bedroom or in some cases, home owners just die. The market is always rolling over; it just has slower cycles sometimes and now is one of those times.

Some parts of the country have even seen an increase in the real estate market, (such as Manhattan and Scottsdale) and real estate agents in several states report that they have a healthy market.With building permits reportedly down to 1993 levels, new houses will be at a minimum this year a lucky break for existing home owners.



Fireplace Design Ideas