Refinance Your Mortgage Tips

Investing in Property

Investing in Property Opportunities In The UK

According to a recent government survey there are 750,000 unused homes in the UK waiting to be brought back to life and that number doesn’t include the vast number of run-down houses that are still lived in. These properties represent a golden opportunity for someone who is disciplined and organised to make a tidy profit. 

The most important thing for any prospective property investor is to have the right financial backing. Before you even consider buying a property, work out what you can afford and what sort of returns you’ll need to make a good profit by checking out Santander’s mortgage payment calculator.

High Yield Property Rental Return

If you’re looking for rental return you should look for houses that can offer high yield. Yield is the rate at which you’ll earn back the money you’ve invested. So, if you spend £100,000 buying and doing up a house, and earn £10,000 a year in rent (after all fees and expenses) your yield is 10%.

Now, because of the way that the market works, getting high yield properties is only possible if the underlying house prices are low, so if you live in the south east, you’ll struggle to make fast returns on rental properties. However, in certain parts of the country, a 10% yield is common, and this represents brilliant value for money, because in ten years, not only will you have earned all the money back that you originally invested, but you’ll also own the house, which you can sell on for a tidy profit.

Investing in Expensive Property

In places where house prices are more expensive, a better option is usually to sell the property on. London, for example, is very expensive, but if you can do a house up to a nice standard and sell it on, you could make truly significant profits. The key is not to spend more than you have to on a renovation, people often get carried away and spend masses on little details, what you want is a good, solid standard of finish and not to spend too much, that way you maximise the value of your house without cutting into your prospective profit too much.

Unless you’re fortunate enough to be able to buy properties up front, you’ll need the right bank to help with your developments. Most important is to get a mortgage where you don’t have to pay a huge penalty if you pay the money back straight away. Or, if you’re going to rent the property, a good buy-to-let mortgage will help you maximise your earnings.

Property investment is not for the faint-hearted and you should never buy a house without knowing any prospective problems. Always have a good look round first, and make sure you get a survey done so you don’t run into any unpleasant surprises.

What To Do With Underwater Mortgage When Getting Divorced?

Getting Rid Of Underwater Mortgage When Divorced

Getting divorced is always a bad situation, it gets worse when you have an underwater mortgage too. Who gets the home when divorcing with an underwater mortgage on the house?  Getting divorced is a moment in life where a person realize that all the rational decisions made and the emotional feelings have turned all wrong. But when facing a financial decision like what to do with the under water mortgage situation, a cool rational decision needs to be made.

There may be more than 60% of the homes in a underwater situation, meaning the mortgage loan is larger than the home value. This is a situation where the monthly payments are very high on a property which is worth very little. When getting divorced, the  the couple need to decide how to divide the mutual resources, and who stays with the home is a major question. Staying with the property means getting an underwater mortgage with it..

The experts from MortgageLoan.com have reviewed his situation, read the post by Kara Johnson about getting divorced and underwater mortgages:

“When a divorce occurs and the couple shares a home with a mortgage, one of two things typically occurs. The first is that one person gets the home in exchange for financial considerations in the divorce agreement, and the mortgage is refinanced into that person’s name alone. The other is that the house is sold, and the proceeds are divided among the two according to the divorce agreement.

           

That’s how it works when there’s equity in the house. If the mortgage is underwater, though, the house is a liability, not an asset, and things get much stickier. At the same time, the basic options are the same 1) get rid of the house or 2) one person gets it. Here are some of the ways to do that.

 

Refinance

 

If you can do it, this is probably the best-case scenario. There are programs that allow you to refinance an underwater mortgage, most specifically, the Home Affordable Refinance Program (HARP), which is due to announce new, more relaxed guidelines Nov. 15. If you can, refinance the mortgage under the name of the party keeping the house, and make some other arrangements in the divorce decree to reflect the financial liability he or she is assuming.

 

For this to work, the person getting the house needs to have enough financial resources to continue the mortgage on their own. In addition, some lenders may decline to do a HARP refinance if one person is coming off the mortgage, although it is permitted under the program’s basic guidelines.

 

Another option is a cash-in refinance, where one or both of the divorcing parties contribute money toward paying down the mortgage balance far enough that it can be refinanced. Again, these contributions need to be factored into the overall divorce settlement.

 

 You can read more on cash out refinance solutions and requirements, it might be a way divide the funds differently when getting divorced.

Short sale

 

This is where you try to get the lender to agree to let the home be sold for less than balance owed on the mortgage. Usually, lenders are reluctant to do this unless it’s apparent the mortgage holder will be unable to continue making mortgage payments. A divorce may qualify if both parties’ incomes were contributing toward the mortgage payments.

 

One of the downsides of a short sale is that it does a lot of damage to your credit, since it goes on both of your records as a settled debt not paid in full. In addition, some lenders may still refuse to grant a short sale even though you’re divorcing, preferring to still hold both parties liable even though they are no longer married.

 

Foreclosure

 

If you’re well underwater, this may make the most economic sense, even though it will savage your credit rating for seven years. Many divorcing couples simply choose to mail the keys back to the bank and abandon the property, a process known in the industry as “jingle mail.”

 

In some cases, one of the ex-spouses will continue to live in the property after both have ceased making mortgage payments, simply waiting for the bank to eventually reclaim it. Since some foreclosures are taking in excess of two years these days, this can be a financial benefit to the party staying in the property. The downside, particularly for the non-occupying ex-spouse, is that it’s going to take that much longer for the blot to come off their credit, since it extends the foreclosure process.

 

On the upside, if you remarry soon after, you may be able to buy another home fairly quickly using your new spouse’s unblemished credit, though you may not be able to count your income toward qualifying for the loan.

 

On the downside, foreclosure may not get you off the hook if you have a second mortgage on the property. Typically, a lender’s only recourse in a foreclosure is whatever it can recover from the sale of the property. But if the second mortgage holder gets no payment from the property sale (since it all went to the primary mortgage holder), in some states that means its claim is still valid and it can still seek reimbursement, perhaps years.

 

Deed in lieu of foreclosure

 

This is a somewhat better option than “jingle mail,” if your lender will accept it. You tell your lender you’re getting divorced, won’t be able to afford the home anymore and ask to simply sign the deed to the property back over to them.

 

This gets you clear of the house without any further liability, and will have less impact on your credit than a foreclosure will – and you may be able to negotiate how the lender will report it to the credit bureaus. For the lender, the attraction is that they avoid the cost of foreclosure and get the property in better shape than a typical foreclosure, which is often in neglected condition. You also start rebuilding your credit sooner than if you let the property go straight through the foreclosure process. Get the full post here…

 

Underwater Mortgage When Divorced

Woody Allen once said, when you are looking for a wife pick a wife you would like to get divorced from.. If the divorce are nasty what ever you do will be total mess, because one of the sides getting divorced would invest all the energy to cause harm. Seek  proper advisement from a lawyer, but keep an open mind about some of the divorced solutions for underwater mortgages.

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Restructured Home Affordable Refinance Program – Is NOT Good Enough

Restructured Home Affordable Refinance Program

Bob Clement

There seem to be a simple truth that slips away from the eyes of the decision makers. The is a need for a better Restructured Home Affordable Refinance Program! There are millions of household that work, pay taxes and try to survive the economic earthquake of 2008. All the financial programs are somehow missing the average Joe and his wife.

People are in deep trouble when their home property is underwater, worth less than the mortgage they still have to pay the lenders. This negative equity is a ticking bomb, as the lenders have just as much to lose, if these underwater properties drown in deep (foreclosure)waters. There are not enough new refinancing options for underwater mortgages, as Former U.S. Rep. Bob Clement writes in the review below.

“Recently, President Obama unveiled the restructured Home Affordable Refinance Program (HARP), one of the only programs assisting homeowners who are “underwater” in their mortgages. The program was set up in 2008 to help homeowners refinance, but the restrictions were too rigid.

HARP reforms are improved but still restrictive. HARP applies only to homeowners with Fannie Mae and Freddie Mac loans. To qualify, they must have paid six consecutive months on time. Closing costs and other fees will be reduced. Income requirements have been waived, and insurance can automatically transfer to the new loan.

Other institutional lenders need to find ways to offer more flexibility in their mortgage requirements. Bankers tell me their hands are tied by new stricter federal definitions of qualified mortgages. Perhaps they can set up special loan categories to help young professionals and promising wage-earners become homeowners in spite of their school debts.

I understand the lending institutions’ caution. I sit on the board of directors for a small bank myself, but standards that are too strict will cause more stagnation in the housing market and compound the problem. I believe we have overcorrected the problem that spawned the bubble burst.

We need home mortgage policies that help ordinary families avoid foreclosure.

The rich can take care of themselves, the poor will be taken care of, but who rallies for the middle class? They continue to pay the taxes, funding the programs for those who can’t and those who won’t. We bailed out Wall Street; it’s time we give the middle class some overdue help.” Read More…

Former U.S. Rep. Bob Clement is president of Clement & Associates, a business development firm (www.bobclementassociates.com) He represented the Fifth District of Tennessee 1988-2003.

I think Former U.S. Rep. Bob Clement has touched the subject in the right aspect. The rich will manage, the poor will be taken care off by others (as it was always) but the working class people with underwater mortgages need refinancing solutions better than the Restructured Home Affordable Refinance Program.

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New Home Underwater Refinancing Options

Homeowners Underwater Refinancing Options

Homeowners underwater refinancing option are very narrow these days. Those who have exceeding mortgage balance of their property, know very well the ineffectiveness of trying to refinance. Refinancing options for underwater mortgages are limited because many lenders require some sort of equity in property. The ideal amount of equity for lenders is at least 20 percent.

Even with such constraints, the borrowers have different options, for example, the “Making Home Affordable” program by the government. Below are some new home underwater refinancing options for the borrowers.

Underwater Refinancing Option #1 HARP

Upon meeting a certain criteria, you can secure refinancing through HARP (Home Affordable Refinance Program). This plan allows the borrowers to secure refinancing loan which is 105 to 125 percent of the total value of the property.

Usually, every underwater loan does not qualify for HARP. If you are on your way to foreclosure, or there are felonious payments in the last 12 months, you will be automatically disqualified from the program.

To secure HARP, you must have a rational payment history, good credit score as well as a buildup of present home financing and detailed lender guidelines. Also, HARP is not meant for everyone, while lenders have closed many HARP loans due to various ineligibility issues by borrowers. According to lenders, if HARP refinancing can escape you $300 to $400 of the monthly mortgage payment, it can give you a difference of either keeping or losing your property.

If your score is less than 700, you may need to improve the FICO score, this can save you thousands of dollars and improve your chances to get a YES from the lender. No lender wants to take today unnecessary risks, improving your score by a few dozen points, can be all you need. This can be done by following a simple ‘clean credit guide’, just like this one.

Underwater Refinancing Option #2 HAMP

You can qualify to secure HAMP (Home Affordable Modification Program) even with underwater mortgage and missed out payments.

In order to qualify, you should prove your financial hardship. Your mortgage must be owned by the lenders who are signed up with the Treasury. For this program, the government finances up to $1,500 to the lenders to process the loan, however, the lenders have got the ultimate right to approve or disapprove the HAMP application. 

HAMP might be a very simple solution for many borrowers, but there are also some very strict HAMP qualification guidelines. Also, the home should be your primary residence, the amount of mortgage should be less than $729,750, your present monthly payments should be more than 31 percent of the present gross income and you must prove the disability or difficulty to make payments. 

Upside Down Mortgage Refinancing -Reality Check

The underwater borrowers, who are unable to qualify for the new home underwater refinancing options, should also, realize the fact that these plans do not always work for everyone. Unfortunately, at present there are no underwater refinancing options  for borrowers backed by the government.

In spite of these barriers, you should not stop negotiating upon loan modification to your mortgage lender. Many lenders are ready to offer different patterns of loan restructuring as a substitute to the foreclosure, however, these are not backed by the government.

Unfortunately, when facing no new home underwater refinancing options, you should inquire about any chances of a short sale. This means that you are ready to sell your house on market price with the remainder amount of loan absolved by the lender.

Tips for Refinancing Investment Property Underwater

Refinance Your Underwater Investment Property

When the housing market in the United States crashed, many people realized the fact that their homes were not as worthy as their mortgages. This was not a new situation in the country; however, today things have changed. Here we will review refinancing underwater investment property.

Unfortunately, many people who are trapped with their mortgages prefer to let the mortgage providing companies go for foreclosure. Alternatively, these people have started to move away from their homes before the procedure starts.

The new and present rules for refinancing investment property underwater allow people to benefit from refinancing underwater loans. Usually, it is impossible to find conventional underwater loan refinance even during the greatest economic boom. Moreover, the banking institutions have revamped the lending practices for prime customers too. The mortgages now only cover up 80 percent of the total value of the property for either a refinance or a first mortgage.

This condition evades most of the refinancing investment property underwater plans, in spite of the well-established credit ratings of the customers. Low credit ratings and late payments make it even more difficult to refinance underwater property. Lately, Federal government has initiated an exclusive program to assist people with refinancing investment underwater plans. This has been incorporated as a part of their financial stimulus plan.

HARP For Refinancing Underwater Property

The HARP (Home Affordable Refinance Program) assists people with underwater refinancing loans when their mortgage balance falls between 105 percent and 125 percent. Practically, not many people will be able to benefit from this program, but they still will be able to at least retain their homes.

If a person is interested to refinance underwater loans under the HARP program, the amount of mortgage must be sufficient. Any late or no payments will disqualify them automatically from the eligibility of the program. Your loan must be backed by any mortgage agencies sponsored by the government. Most people are unaware of the agency who owns their property. They can get this information very easily through their lender.

In order to secure refinancing investment property underwater loan, you will need to have a stable credit score, whereas some lender rules will also apply. People can also simplify the refinance investment property underwater loan through their present lenders, whereas they can also go for other financial institutions.

If your credit score is less than 700, you should focus now on raising your score. Having your score taken care of, and getting 30-50 more points, mean getting more smiles from the lenders, and get better rates! The credit restoration process is not an immediate wam-bam process. It can take as little as 37 days, or even months if you do not follow a professional guide.

The great part about cleaning your credit is that it can be done alone, you do not need expensive companies or pay hundreds of dollars for such services. Once you buy a good ‘how to clean your credit guide’  you can follow the steps and expect your credit score to improve.

Modification Program for Underwater Investment Property

People who are interested in taking up refinancing their investment property underwater loan, but are not eligible for the HARP program, might be able to benefit from HAMP (Home Affordable Modification Program).

However, the loan must be backed by similar government agencies or through another lender that is eligible for the program. HAMP (home Affordable Modification Program) is supported by the government, but it does not fall into refinancing investment property underwater category. Instead, it is a loan modification plan which changes the home mortgage terms permanently. 

Underwater Property Refinancing Conclusion

If you qualify for a refinancing underwater loan, you must hire a mortgage broker in order to make the process simple and hassle free. A mortgage broker will help you immensely to get the best terms and rates.