On March 25, 2004, HUD published an interim rule in the Federal Register at 69 FR 15586 amending Title 24 CFR Part 206 to implement its refinance insurance authority and mandate an “anti-churning disclosure” requirement as a consumer protection measure. The originating mortgagee of a HECM refinance must contact the current HECM Servicer and obtain the following information:

• The payoff amount for the existing HECM.
• The current principal limit of the existing HECM. This form ensures that the mortgagor is not being induced to refinance his/her existing HECM without benefit to the mortgagor and/or solely for the benefit of the mortgagee.

This measure ensures the borrower is not allocating additional debt. 1) The mortgagor has received the required HECM Anti-Churning Disclosure form; The originating mortgagee of a HECM refinance must contact the current HECM Servicer and obtain the following information.

The major condition is the house is the property of the candidate. If the loan is over a lengthy period of time, when the mortgage comes due, there may be a big amount due. Similarly , if the cost of your house decreased, there won’t be any equity left over.

How Reverse Compounding Mortgages Work

Differing from a standard “forward mortgage”, your debt increases together with your equity. Borrowers who’ve got a high debt to revenue proportion or poor credit could also find reverse mortgages appealing as the equity in the home and the value of the home are far more applicable factors than credit report. As well, reverse mortgages must be the sole debt against your home.

Similarly , if the cost of your house decreased, there won’t be any equity left over. If the loan is over a lengthy period of time, when the mortgage comes due, there may be a big amount due. Often single family homes and little apartments and city houses are also suitable for a reverse mortgage.

In addition to being a home owner of at least 62 years of age, the borrower needs to either completely own their home outright (i.e. Over the years of making mortgage payments you build up equity in your home; that equity can be withdrawn to provide you, the homeowner, with funds that can go a long way in assisting with your standard of living, lowering your medical bills, make improvements on your home, or even towards that dream vacation you’ve been putting off. The reverse mortgage does not need to be repaid to the lender as long as you, and other approved borrowers, use the property as your primary residence.

However, you can use the money obtained from the equity to purchase additional properties. This type of mortgage differs from a conventional mortgage in several key ways; with the age restriction being just the first requirement of qualification. A reverse mortgage is a unique, and often misunderstood, home equity loan that has been tailored specifically for home owners over the age of 62.

If you’re looking for how to figure your potential dollar amount for this type of loan, take a look at our other posts on mortgage calculators.

What Everyone Should Know About Reverse Compounding Mortgages is from Florida Home Loan Report

This is most definitely the worse thing a person could do. Remember this mortgage payment will be your responsibility for the next 30yrs. It is part of the loan officer’s job to answer all of your questions and make sure you understand all of the documents you will be signing before you exit the office.

Before becoming a Mortgage Broker I purchased my home. So I have been on both sides of the fence and I truly understand the mixed feeling of being happy that I qualified to purchase a home and feeling somewhat unclear of the mortgage documents that I signed.

I did use a mortgage calculator, but was still not as prepared as I should have been. Unfortunately my loan officer did not explain the documents and options to me very well. I was very young excited and anxious to be a homeowner. I ended up signing a document that took me three years to get worked out.

I cannot express enough the anger I felt not only with the loan officer for not being efficient but more over, with myself for not taking the time to read what I was signing.  I began to think of how many other people went through the same or similar ordeal that I did. And I vowed to be a better loan officer than the one I had.

I don’t proclaim to be a guru but I have done very well, and I’m willing to share my knowledge with you. My incident inspired me to become a Mortgage Broker and create this information for you to understand and not make the same mistake I made.

Mortgage 101: Understanding the Basics is from Florida Home Loan Report

Of the various types of mortgage available, the fixed rate mortgage is only one of them.  You get your interest rate locked for the period of the deal, usually a few years.  The interest rate you pay is locked; therefore your monthly payments are also locked.

Do fixed rate mortgages have any plus points?

You benefit by not having the yo-yo effect on your monthly payments. They stay the same every month.
You can benefit by knowing your monthly payment is fixed which allows you to budget more effectively.

It doesn’t matter how much interest rates rise, your payments are fixed.  In the not too distant past there have been some real scary rate rises.  People on variable rate mortgages are much more likely to be affected by rapid rises in interest rates.

There can be certain circumstances when a fixed rate mortgage may not be right for you.  If you think you may move home, or even have another child and need an extra bedroom, then think carefully before taking a fixed rate mortgage.
Either of these events will cause you to trigger an unwanted redemption penalty.

A redemption penalty is a charge that almost always comes with a fixed rate deal.  These charges can be pretty steep, and come at a time when you don’t need the extra stress.  These unexpected charges can hurt. Consider carefully whether a fixed rate is the one for you.

It’s worth thinking about paying a bit extra each month in addition to whatever you normally pay.  You may have a fixed rate but it doesn’t mean your payments have to be fixed if you can afford extra.  The lenders would love you to do this but they will rarely tell you that you can indeed pay extra.

What are the best reasons to paying a bit extra every month?

The extra payments reduce the sum owed quicker and the result is you save years off the term of your deal.  You can save a lot of cash as well as knock a few years off.

In what way does a mortgage overpayment calculator work?

You input various figures relating to your mortgage. You can put various amounts in as the overpayment. Feel free to play around with this figure.

You get a resulting figure out of the calculator in years you can shave off.  It also gives you a figure in cash that you can expect to save.  The figures in years and cash saved will increase the more you overpay each month.

You might be pleasantly surprised at the savings to be made. If you had a 25 year mortgage and borrowed 100 grand at 5% interest. You could save over twelve thousand and shorten the mortgage by more than 3 years just by paying an extra 50 each month.

That example is paying just 50 extra every month. What if you could afford 100 a month to overpay? Using the same example mortgage from earlier we now pay 100 extra. You can knock a staggering 6 years or more off the length and save yourself in the region of 20 thousand.

An extra advantage is you won’t have any payments to make during the last few years of the mortgage. It’s definitely a reality for you to be free of your mortgage years before planned. Of course your lender will never tell you this, you have to discover this on your own.

In our example where we saved six years off the length with a hundred a month overpayment. You pay nothing more for the last 6 years of the term, which equates to about another 40 grand saved. You don’t pay this money to your lender so you get to keep it, either save it or spend it.

In this article we’ve looked at the potential of fixed rate mortgages. Every month you pay the same so you get to sleep easy at night knowing this. We also had a look at the savings to be made by paying a bit extra every month. It all adds up.

How Great Are Mortgage Overpayment Calculators is from Florida Home Loan Report

Are you 100% sure about Homeowners Loan Renegotiation?

Even though a lot of people nowadays are doing it, it does not necessarily mean that it is the right option for you. Renegotiation is a huge step, and there are instances where it does not apply, even though it seems like a good idea the first time you hear it.

Think twice about Home Loan Renegotiation if you can relate to one of these people:

Mr. A’s home equity value has dropped.
Mr. A. is thinking hard about the status of his home’s value. Property values across the nation has gone down, so in most cases it does not make much sense to refinance.

Say that Mr. A gets to refinance up to 75% of his property’s new value, he should check to see if his original Mortgage is less than that. If it’s higher, chances are he won’t be able to pay the existing loan with his new terms. Home Loan Renegotiation wouldn’t be helping him at all, if you think about it.

Mr. B will be paying his first loan for a long time.
Let’s say Mr. B has an existing Homeowners Loan that he has agreed to pay for 30 years. He has been paying that for 20 years now. Good. So he should think really hard before getting another 30-year loan.

For him, another thirty years would mean another reaping of interests. Add to that the obvious costs of closing up a new loan. Once he has done the numbers, it will be clear that he would be paying more in total if he decides to go with it.

Mr. C. only has a few years to go on his existing loan.
Sure, Mr. C may need the cash now, but is it really that grave for him that he needs to get another loan for it? If he only has a few years left in his current one, might as well bear it out and be done with it. Remember, a new loan means he’ll be paying a lot more money in the end.

Mr. C should think of other cash flow alternatives that will not put his home at risk and put him in a money losing deal in the long run.

Mr. D has already used enough equity on your first loan.
Lets’ say that Mr. D took out a home equity loan of 90% of his home value. Homeowner’s Loan Renegotiation might not be for him right now, because good rates for lower loans that that is rare to nonexistent.

When he refinances a 90% or higher loan, he probably needs a loan equal to it or higher. This is now almost a 100% financing option and the rates will be noticeably higher. 100% loans are pretty much hard to find these days anyway.

The lowdown is this: Refinancing less than 90% will yield him bad rates, while over 90% will give him higher rates or none at all. Either way is shaky ground, so Mortgage Loan Refinancing might not be the best option for Mr. D.

Under the right circumstances, Home owners Loan Refinancing is a good option. But if you find yourself in similar places as one or two of these people, it is better to re-assess and find other ways to get money and/or solve your Homeowners Loan concerns. In the end it is best to see, shop and compare what rates are out there, so you can decide for yourself what to do next.

The Four People Who Shouldn’t Go for Home owners Loan Refinancing is from Florida Home Loan Report

Refinancing a Home Loan Defined

Renegotiation a Mortgage Loan means applying for another loan plan that will pay off your existing debt. As you avail of a new package, you will have to shoulder different terms and conditions. This option is meant to lessen the monthly interest charges that you have to pay for.

Why You Need to Consult an Expert

The Home Loan brokers are the experts who specialize in home loans, Renegotiation loans, home equity loans, Mortgage rate computation, and all other types of mortgages. They are the people with whom you can work with if you want to get the best deal out of Renegotiation your home. They have studied and earned their credibility through the years of serving the homeowners. It is also by consulting an expert that you get to learn the advantages and disadvantages of Renegotiation, your chances of paying for a lower interest rate, your home’s equity and cash out benefits, and many more.

You should also know the requirements, the qualifications to become eligible for Renegotiation, and the other types of loans that may fit your needs. Nevertheless, you will be able to save more time and money if you talk to the right person who knows everything about Renegotiation.

The Benefits to Enjoy with Refinancing

Home owners Loan Renegotiation means that you can save thousands of dollars, lessen the tenure of your own Homeowners Loan, heighten your cash flow, and offer you the low interest rates, among others. It is your duty to find the right Homeowners Loan broker who can advise you with everything that you can benefit from. Take note that an honest Home owners Loan broker will always consider the potentials that will work to your advantage and lead you to the best deals.

Renegotiation as a Money-Saving Opportunity

Generally, a new Mortgage will convert your high interest payments into a lower one. This process will then provide you with every opportunity to spend less money on your monthly payments and save more.

Some homeowners decide to shorten the term of their loans. For example, if you refinance your 30-year-Home owners Loan into a 15-year-Mortgage Loan, you get to pay lower interest rates. However, you will have to settle a larger monthly bill but the catch is that you are able to save more because you can pay off your debt in a shorter time. On the other hand, some homeowners change the mode of their interest rates from an adjustable rate into a fixed rate loan. Whichever is your choice, you must always be abreast of both the rewards and drawbacks of Renegotiation your Mortgage Loan.

Furthermore, home Home owners Loan refinance packages let you consolidate your debts so that you don’t have to pay for more. The thing is, you allow yourself to save money because instead of paying different interest charges, you simply roll them into one and reduce the amount that you have to settle.

Vital Components Of Mortgage Loan Refinance Advice is from Florida Home Loan Report

If you know Jack and Cyndee Haydon, you know them to be two of the most well-respected and hard working Clearwater Florida Realtors out there.  They work extremely hard to find great deals for their Clearwater Beach condo buyers – but like so many Relators working with upscale luxury condo properties, like those in the Clearwater Beach Florida / Sand Key Florida area – they’re running into a roadblock with the allowable Fannie Mae loan limit for conventional loans set at $417,000 – requiring a minimum of 20% down.

Obviously, $417,000 would cover most areas of Clearwater real estate – however, when you consider Clearwater, Florida is home to some of the best beaches in the United States, it’s not nearly enough if you want to buy even a modest, much less a luxury beach condo and are looking for a reasonable loan.

Even if you were planning on buying a condo and putting 20% to 25% down it’s a problem because most Clearwater Beach Florida oceanfront 3 bedroom condominiums are still selling from $800,000 to well over $1 million dollars even in today’s real estate market.

Related articles:

• Clearwater Beach Real Estate – What do 3 bedroom Beachfront Condos cost?
  
• Clearwater Beach New Construction - What’s Happening?
• Sandpearl Condos - One of the best places to live in Clearwater Beach Florida

Clearwater Beach FL Jumbo Borrowers Feeling the Pinch – and So are Sellers

So, how is the challenge in findig Jumbo Mortgages for Clearwater Condos a problem for sellers?

In Cyndee’s experience…

1) Low convention home loan limits for the Clearwater Beach area are causing a lot of mortgage pressure to purchase properties for $520,000 (or less) – which puts downward pressure on sellers who want to sell for top dollar.

2) Clearwater Jumbo Mortgage Rates (and terms) further limits the number of ready and willing buyers in this “jumbo” price point – so with less willing and able buyers, there is again more pressure on sellers to make a deal with the remaining buyers – and we’re seeing cash is king. Cyndee and Jack’s last two beach condo buyers paid cash for their gulf beachfront condos.

Clearwater Condo Buyers – A Mortgage Broker’s Dream! (Rates and Loans – Not so Much!)

What’s hard to believe is that Cyndee and Jack Haydon – as Clearwater Realtors – are working with many buyers who are the best clients a Florida Mortgage broker could want (excellent credit, no debt, no issue with income qualifications, etc.).  The problem is, that they’re not willing to buy a second home / vacation home under the recent terms one National bank / lender gave.

For Jumbo loans on beach condo purchases needing a loan over $417K but under 1 million they didn’t even offer a fixed rate loan. Rather, thaey offered a 5/1 ARM at  5.75% with a 1% point up front!  So basically, when conventional home buyers are getting mortgage rates under 5% – some of the best possible borrowers are being asked to pay a premium of almost 7% and up.  (To quote Wallac Shawn’s Vizzini Character in the Princess Bride… “INCONCEIVABLE!”)

When Cyndee asked “why?”,  the banks told me that it’s because “Jumbo Loans” are currently the highest loans in default – a point I’d made to her not too long ago. Unfortunately, those I see in preforeclosure  and foreclosure on the beaches now are very different than the potential buyers we are seeing. We all know lending had loose guidelines back a few years ago, and many real estate buyers got in way over their heads – these are not the buyers the Haydons are working with today.

77% Pending Sales of Clearwater Beach Condos and Sand Key Condos are NOT Jumbos

There are currently 22 Clearwater condos under contract and pending sale in the Tampa Bay MLS – of that 17 of them has a listed purchase price of under $420,000, 4 are in the $600K’s and one is pending at $849,000 (all of which could be lower on closing – we don’t know the negotiated purchase price at this point). It’s not surprising that it was recently reported that 50% of all real estate sales in Florida this year have been cash transactions.

In our experience, today’s Tampa mortgage rates for Jumbo Loans have caused several of our clients to scale back their Clearwater beach condo purchases, and others have postponed them while they free up additional funds to make up the difference in purchase price and “conforming loans.”  We’ve seen several people who planned on buying beachfront condos for @$800,000 and now have scaled back $200-300K to qualify for the conforming loan rates and terms.

So if you are a seller on Clearwater Beach Florida today (or Sand Key, Island Estates and our Gulf beaches), the best thing that can happen for you right now is that Banks get bank into the Jumbo loan market and begin to offer more attractive Jumbo Loan rates and terms for willing Clearwater Beach buyers.

Clearwater Beach Real Estate gets some good Jumbo Loan news

Cyndee pointed me to an article that stated “that the hard-to-find jumbo loan may be making a comeback.  Bank of America is among the major banks rolling out jumbo mortgage programs and holding the loans in their own portfolios.

It will offer loans from $730,000 to $1.5 million with 30-year fixed rates under 6 percent; but borrowers must make a 20-percent downpayment, have good credit, provide proof of income, and hold six months’ of principal, interest, property tax and insurance payments in reserve.”

The Haydons are constantly working with  local bankers who offer in-house “portfolio loans” – and I sure hope that other banks, both local and national, will follow Bank of America lead in the Jumbo loan market.

Clearwater Beach Condo Update: Shortage of Jumbo Loan Options Hurting Buyers and Sellers is from Florida Home Loan Report

Householders can seriously help themselves in the process by taking a few simple steps. First the house owner should determine his refinancing goals. Next the house owner should talk to a re-financing expert and finally the homeowner should bear in mind that re-financing isn’t necessarily the best solution. The 1st step in any re-financing process should be for the home-owner to determine his goals and why he is considering re-financing. There are a few different answers to this query and not one of the answers are always right or incorrect.

The most important thing is the householder is making a decision which helps him achieve his fiscal goals. While there are no right or wrong answer to why re-financing should be considered there are, certain reasons for re-financing which are common. As an example, some people re-finance to reducing their monthly home loan payments ; others do it to consolidate existing debts.

The explanations for wanting to re-finance is not as significant as determining this reason. This is because a house owner, or maybe a monetary counsel, will have a difficult time determining the best re-financing option for a homeowner if he does not know the goals of the house owner.

Once a house owner has figured out why they need to re-finance, the homeowner should consider meeting with a re-financing expert to figure out the best refinancing strategy. This will probably be a technique which is financially sound but is also still geared to meeting the wants of the householder. Owners who feel as though they are particularly well versed in the topic of re-financing might consider skipping the option of consulting with a re-financing expert. However, this isn’t endorsed because even the most educated homeowner may not be aware of the most recent re-financing options being offered by lenders. While not understanding all the options may not appear to be a big thing, it can have a significant impact. Householders might not be mindful of mistakes they are making but they may here of buddies who re-financed under similar conditions and receive more favorable terms. Hearing these eventualities can be quite disheartening for some homeowners especially if they could have saved significantly more while re-financing.

Owners who are considering re-financing may realize the significance of judging a number of different re-financing options to determine which option is best but these same owners may not realize they should also meticulously consider not re-financing as an option. This is commonly called the “do nothing” option as it refers to the conditions which will exist if the homeowner does not make a change in their mortgage situation.

For each re-financing option considered, the house owner should determine the projected regular payment, amount of interest paid during the course of the loan, year in which the loan will be fully repaid and the quantity of time the householder will have to remain in the home to recoup closing expenses related to re-financing.

Householders should also identify these values for the present mortgage. This may be awfully beneficial for comparison purposes. Owners can compare these results and frequently the best option is quite clear from these numeric calculations. However, if the research does not yield a clear cut answer, the homeowner may need to evaluate secondary characteristics to make the best possible decision.

Re-financing Your House – Your Various Options is from Florida Home Loan Report