Tax Deductible Mortgage
In 2007, your mortgage insurance will be tax deductible helping to save Americans millions of dollars from this new law. Now instead of getting a piggyback loan that can and will be costly in the future they can consider mortgage insurance instead.
This is really going to help close to a million Americans who will buy a home next year using mortgage insurance,” says Kevin Schneider, president of U.S. mortgage insurance business for Genworth Financial.
Bottom line for consumers: Don’t get a piggyback loan without taking a serious look at mortgage insurance, because mortgage insurance is likely to be cheaper in the long run, and it might even cost less in the short run.
Mortgage Rates Are Rising
Mortgage rates fell and now there rising again. For those people with adjustable rates, this is a very bad time. Especially around the time of Christmas when you may already be spending hundreds on gifts and donations.
Rising interest rates might be great news for your savings accounts, but they’re not such great news for anyone whose mortgage rates adjust with the rising tide. In fact, adjustable-rate mortgages appear to be putting a financial strain on some homeowners.
Low Payment Now, High Payment Later
That low payment looks sweet when you first sign up for a mortgage for your home, however what potential homeowners are not being told is that they could end up paying much more than they could afford later on.
Mortgage lenders often emphasize the low initial payments, but gloss over the possibility of higher payments later, according to John Dugan, U.S. Comptroller of the Currency.
Dugan says the government is taking steps to address the problems that arise from a variety of non-traditional mortgages that have helped fuel a housing boom.
One problem, he says, is that some lenders often fail to evaluate a borrower’s ability to make higher payments.
Low Income Families and High Risk Loans
Many low income families are finding themselves facing foreclosure because they cannot afford the high payments affiliated with high risk loans.
Expanding opportunities for more people to buy a home is a good thing. But we do not want Americans to become overextended and see their dream end in foreclosure,” Paulson said.
$50 Million Dollar Mortgage Fraud
Officials are accusing Charles Elliott Fitzgerald in a scheme so complex that its at first hard to understand. The scam took money from banks and lenders at more than $50 million dollars. The scheme includes taking out fraudulent loans in which they bought homes and flipped for millions more than they were worth.
Federal authorities say Fitzgerald and four others bilked federally insured mortgage lenders of millions of dollars using an elaborate house flipping scheme.
The group bought expensive homes in some of California’s most exclusive communities, recruited accomplices to take out inflated loans using bogus appraisals, and then flipped the properties to the accomplices for double or triple their actual values.
Lenders unwittingly funded some 80 inflated loans for more than $50 million over the actual prices of the homes, federal authorities said.
Expensive Mortgages Sold To High Risk Home Owners
Beacon Mortgage Solutions in the UK is very worried about what they call an “unscrupulous” trend that is going on in the real estate business. Some mortgage brokers are purposely selling homes to people who are what they call high risk due to the fact that they have bad credit or may even have declared bankruptcy. This allows the brokers to charge high interest rates and unfortunately the home owners could end up losing everything because they can no longer keep up with their mortgage payments.
Home-buyers with poor credit ratings are known as “sub-prime borrowers”, a pigeon-hole that allows lenders to charge sky-high interest rates. In the UK, the sub-prime market is reckoned to be worth £30 billion a year.
With stakes like that, more and more financial institutions are getting in on the act, and asking brokers – their prime route into the market – to sell their wares.
How To Get A Mortgage When You Have Bad Credit
If you have bad credit you might think that getting that perfect home you’ve always dreamed of will stay a dream, but that is not necessarily true.
A mortgage is a secured loan, meaning you put up your house as collateral. Therefore, if you fail to pay off your loan, the lender has the right to foreclose on your property. So as we said before, it may be more difficult but not impossible to get a mortgage if you have bad credit.
Statistically speaking, those with a lower credit score are more likely to default on their loans. To offset the risk, lenders usually charge you a higher interest rate and limit the amount of credit you can borrow (because the higher your interest rate, the higher your payments, which means you have less ability to pay back a higher loan amount). Lenders may also charge higher late payment fees.
Don’t Refinance Your Home
So many families are deep in debt and falling deeper and a go to option that too many choose is to refinance their home to help pay off those rising credit card statements. However there are better options that you can look into and this article talks about one which is debt settlements. With debt settlement you can get the bills bundled into one and have it cut down as much as 60%. There is no need to risk your home to pay the bills.
Mortgage Junk Mail
Mortgages just like anything else you’ve signed up for can have your mail box overflowing with lots of junk mail from any and everyone looking to get into your wallet. The biggest one is life insurance. After all if your getting a home, then you should want to protect your wife and kids by having life insurance. Right? Well maybe not. Read here.
Mortgage Rates Rising: How to Deal
If your mortgage rates start to skyrocket, don’t panic. Whether you are a new home owner or an old one, you can usually call someone for help such as a financial planner. Go online and you will find many others who are in your situation who can help point you in the right direction. There are also lots of informational websites that can usually give the answer your looking for.