Hal's Mortgage Blog

Watch this video for some valuable tips on wells and septic system.

I’m not an insurance agent, but I’ve heard enough stories to know that when reviewing your homeowner’s insurance coverage, don’t assume that everything will be covered in case of a claim.

In fact, a National Association of Insurance Commissioners’ survey revealed that homeowners misunderstood what their policy covered.

Here are some of the things NOT covered by standard homeowner’s insurance policies:

• 68 percent think vehicles such as cars, boats and motorcycles stolen from or damaged on their property are covered.
• 51 percent think damages from a break in the water line on their property supplying water to their home are covered.
• 37 percent think damages due to a break in the sewer line on their property that connects to their municipal sewer system are covered.
• 35 percent think damages from earthquakes are covered.
• 34 percent think damages from mold are covered.
• 31 percent think damages from termites or other infestation are covered.
• 22 percent think pets stolen from or injured on their property are covered.

Call your insurance agent if you’ve done any of the following:

• Acquired expensive possessions, such as furniture, computers, stereos and televisions.
• Made any major home improvements - usually anything more than $5,000.
• A change in your state’s laws where you could be held legally responsible for the actions of anyone who drinks in your home and then has an accident in your house or after leaving it. Your policy should protect you against lawsuits due to these types of liability issues.
• Added any backyard items, such as a trampoline or pool, which may require you to increase your liability coverage through an umbrella policy that protects you in the event that someone is injured while on your property.
• Purchased jewelry, acquired family heirlooms, antiques, art - consider purchasing an additional "floater" or "rider" to your policy to cover these special items. They're typically not covered by a basic homeowner’s or renter’s policy.

Make an inventory of all of your personal property, along with a photograph or video of each room. Also, save your receipts for major items and keep them in a safe place away from your house or apartment. That will make it easier if you need to file a claim.

If it hasn’t happened to you, surely a friend or family member has had the unpleasant experience of foreclosure. One of the most common questions I receive is, “When can I buy another house after foreclosure?”

Yes, it is possible to buy another home after foreclosure, maybe sooner than you think. But it takes patience and planning.

FHA guidelines require a waiting period of three years from the date of the foreclosure before you are eligible to buy again. This will give you time to rebuild your credit. Remember, the underwriter will want to see that you have reestablished good credit.

Many of my clients have found their credit dropped as much as 200 points after foreclosure but by maintaining timely payments on their consumer debt over the three year waiting period are now back in the low 700s.

Those who lost their home to foreclosure in 2009 will be eligible in 2012 subject to the normal rules of qualification.

The rule for bankruptcy is that two years must have passed since discharge of Chapter 7 or 1 year on a Chapter 13 (requires permission from the bankruptcy trustee).

What about VA loans? They are a little more liberal than FHA, requiring only two years since foreclosure before becoming eligible again. The debt must be satisfied however, as it will affect your entitlement. It is best to check your current Certificate of Eligibility (CEO). Any VA lender can assist you with that.

If you would like a copy of this information please click the link below for downloadable PDF

FHA/VA Derogatory Credit Chart

Call me with your questions. I’d love to be of service.

1. Choose a low down payment loan.
There is no law that says you MUST put 20% or even 10% down. There are some loans that require as little as 3.5% or even zero down. This is attractive for three reasons: It’s hard to save for a large down payment, you could earn more interest on that money than you’re paying in interest on the loan, and it’s nice (and sometimes necessary) to have cash on hand after buying a home.

2. Have someone give you money to pay closing costs.
A relative, church or nonprofit organization can give you money for closing costs.

3. Ask the seller to pay some of your closing costs as part of your offer.
Sellers are usually allowed to contribute to a buyer's closing costs.

4. Do not pay too much insurance at closing!
Most Lenders require 14 months hazard insurance paid at closing, so be ready. What happens to that extra money? It sits in your escrow account until you sell the house. It’s safe there, but it often earns no interest.

5. Remember, the homes that you’re looking at don’t belong to your agent.
You must be straightforward about your likes and dislikes in order for your Real Estate agent to do the best job for you. Your agent should show you everything available that meets your requirements. Don’t make a decision on a house until you feel that you’ve seen enough to pick the best one. Review the Multiple Listing printout with your agent to make sure that you are getting a COMPLETE list.

6. Shop around for your home insurance.
A little shopping might help save you money.

7. You can deduct money paid for discount points from your gross income before computing your tax. See a CPA for more information.

http://youtu.be/Yl3653NBElc

The volume of VA Home Loans has increased 135% since 2007. It's no wonder - Veterans and active duty servicemembers can buy a home with no money down. This is indeed a powerful benefit.

In 2010 nearly 90% of the VA loans funded were no down payment loans. Most people, especially younger people and first time homebuyers, don't realize what a benefit that can be. It may be the difference between being able tp buy your first home or having to wait.

It is well known that VA loans have the lowest rate of foreclosure of any loan on the market. However it is intersting to note that of 24 million veterans in the US, fewer than 13% have taken advantage of the program.

Even more surprising, according to a 2004 report conducted by the VA, 20% of veterans are not even aware that the program exists. There is no doubt that the VA Loan program has served as a springboard to homeownership for more than 18 million veterans since its inception in 1944.

Today, the VA loan program is more important than ever for those who have served our country.

Should you use your 401k to pay off your mortgage? You may already know that there is a 10% penalty for early withdrawal, but a new bill proposed by Sen. Johnny Isakson and Rep. Tom Graves seeks to allow you to pull money out of your 401k to pay off or pay down your mortgage.

Here are some of the highlights:
• You can withdraw $50k or half the account value, whichever is less
• No 10% penalty
• You must use the funds to make mortgage payments within 120 days of receiving the funds

I’m thinking that some of my clients who have a second mortgage they would like to eliminate but don’t have the equity to refinance could benefit from this. It could also be a way to lower your monthly payment as well as lower interest rate.

If you would like to read the entire proposed bill, called the HOME Act of 2011 click on the previous link or call me at (615) 895-4265 and I’ll send you a copy.

Most financial experts are not in favor of raiding your 401k for the following reasons:
• Pulling money out of your 401k that is protected from creditors makes it vulnerable to loss if you eventually lose your home
• Anyone with a mortgage can withdraw money from their retirement account whether they really need or not

So, what do you think? Is this a good idea or is it just too risky to be playing with your 401k? 
 

December 1, 2011 is the date lenders are expected to begin accepting applications for HARP 2.0

Estimates are that as many as 7 million homeowners will qualify under the expanded guidelines. This could cause a “flood” of loan applications from homeowners who are “underwater” (no pun intended).

Here’s why you might consider HARP 2.0:

· Unlimited loan-to-value (LTV). This means no matter how much you owe on your home, you can still refinance and pay-off your old mortgage
· You can take advantage of today’s low rates and not have to pay private mortgage insurance (PMI).

You will still need satisfactory and assets as well as quality credit.

There are five things to do right now to see if you qualify.

1. Make sure your loan is backed by either Fannie Mae or Freddie Mac. Here’s how to find out:a. for Fannie Mae go to http://fanniemae.com/loanlookup/ If you don’t find it there go to:
b. https://ww3.freddiemac.com/corporate/ If you can’t find it here either, then your loan is not backed by Fannie or Freddie and is not eligible.

2. What is the date of funding? Look at your closing paperwork. On the upper right hand corner of your Settlement Statement is the date you’re looking for. As long as your date is prior to June 1, 2009, you are eligible.

3. Private Mortgage Insurance. HARP 2.0 is designed to help homeowners with or without private mortgage insurance (PMI). If you have lender paid mortgage insurance (LPMI). If your mortgage statement itemizes monthly PMI, you have borrower paid and should be eligible. If your LTV was less than 80% at the time of the loan, you probably have no PMI.

4. Is your loan current? HARP 2.0 requires that you have no late payments over the last six months and no more than one 30 day late over the past year.

5. If it still looks like you’re eligible, now would be a good time to gather your paperwork:

    · Bank Statements
    · ID – Social Security/Drivers License
    · Homeowners Insurance
    · Pay Stubs
    · W-2s (2 years tax returns if self employed)
    · All documents from previous closing

If HARP 2.0 seems confusing give me a call at (615) 895-4265 and I’ll help you sort it out.

The Home Affordable Refinance Program (HARP) has been extended until December 31, 2013 and allows homeowners to refinance into low mortgage interest rates even if the property has decreased in value.
 
Established in 2009, for Fannie Mae and Freddie Mac, the Home Affordable Refinance Program provides an option for homeowners to refinance “Under Water Mortgages”. A HARP Refinance addresses situations where the homeowner’s property value has fallen causing them to no longer to qualify under traditional underwriting criteria. Homeowners with a loan owned by Freddie Mac or Fannie Mae have the opportunity to refinance with any participating lender as long as the resulting loan is less than 125% of the current property’s value.

The following criteria must be met to qualify for the Home Affordable Refinance Program:

• You must live in the home being refinanced.
• A HARP refinance only applies to Fannie Mae or Freddie Mac mortgages.
• The homeowner must be able to afford the new lower payment.
• The current mortgage must be up to date with no late payments in the past twelve months.
• Payments on the new loan must be more affordable or more stable than on the existing loan.
• The new mortgage balance may not exceed 125% of your home’s current value.

The popularity of the HARP mortgage program has steadily grown since 2009. The three months ending in February 2011 saw record volume of 145,000 new HARP loans.

A participating lender can determine if your loan is owned by Fannie Mae or Freddie Mac and can further evaluate your eligibility.

Questions? I would like to hear from you.