Sarasota Mortgage Rates | The Mortgage Skinny

If you’re having a tough time making your monthly mortgage payments then read the rest of this article and maybe you will be able to figure out how to make ends meet.  There are 6 different decisions you can make in order to make ends meet.  Some of them may be very difficult to make but in order for you to make the right decision you need to have no emotion.  I know it’s extremely tough to have no emotion when you’re deciding if you should keep your home or not but having no emotion will be better for you in the long run.  Below are the 6 decisions you may need to make:

1. Re-negotiate your monthly payment with the bank.  I’ve heard a number of people have tried to do this and have not succeeded, but more recenently banks are starting to open their ears.  I just heard a story about a CPA who was working out new monthly payments with his clients mortgage companies and coming up with great results.  Supposedly he helped lower his clients interest rate down to 2% which allowed his clients to keep their home. 

2. Refinance your loan.  If you are in a situation where you have a high monthly mortgage payment due to a high interest rate and you have enough equity left in your home to refinance, then I highly suggest this.  This may not be a choice for some homeowners because they are in a situation where they owe more on the home than it’s worth.

3. Sell and Cut your Losses.  A great way to get rid of your monthly payment is to sell your home and cut your losses.  If you have money in the bank to pay for these losses then this is an option.  If your home is worth more than what you owe on the home, then this is a great option as well.  This isn’t a great option if you owe more on the home than what it’s worth and you don’t have any money in the bank to pay for your losses.

4. Short Sale.  Short selling your home in today’s market is the best way to cut your losses if you can’t do any of the above.  A Short Sale consists of presenting your bank with a contract that is below market price and asking if they would be willing to accept the contract and close out your lien without putting a deficiency lien against you for the difference.  With the way the market is going, banks are more likely to accept a short sale.  A number of banks are dealing with a lot of foreclosures which consists of a lot of fees for a bank, so doing a short sale cuts out a lot of these fees.  More than likely if they don’t accept a short sale it will result in foreclosure which is extremely costly.

5. Foreclose.  Foreclosing on a property is probably the worst thing you can do.  But if you have no other option, then foreclosing is definitely a way out.  If you read my previous article about foreclosing than you know exactly why you shouldn’t.  Your credit score will go down, it costs the bank a lot of money, and the bank has 4 years to put a deficiency lien against you which may cause you to be in the same position years down the road. 

6. Bankruptcy.  Bankruptcy is not a bad decision if you have no other way out and there is no light at the end of the tunnel.  Filing a Chapter 7 Bankruptcy will wipe away all your debts and is basically be the end of the story.  In today’s world it’s tougher to qualify for bankruptcy, you either need to have an income below the median income or you need to be qualified as insolvent.  Either way, once you have qualified your creditors can no longer contact you and your assets will be divided between the creditors.  The creditors can not put any lien against you and you are officially working with a clean slate.  Only problem with this is your credit score drops dramatically and you’ll have a tougher time qualifying for credit cards, auto loans, and mortgages.

None of these decisions are something you want to make.  But depending on your situation it may be something you have to make.  As I’ve said before, I don’t reccomend you making a decision this big without first consulting an attorney or CPA. Every situation is different so contact someone who can review yours and help you make the right decision.

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Are you interested in trying to improve your credit scores so that you can get a better interest rate on your mortgage?  In this article I’ll show you how to go from that sub prime loan with prepayment penalties and high interest rates to an A-paper loan with low closing costs and low interest rates.  Consumers interested in purchasing or refinancing a home will pay an interest rate based on current market conditions and their ability to pay back the loan. The borrower’s income and debt ratios are taken into consideration by the lender, as well as the predictability factor provided by credit scoring. It’s important to have a mortgage professional in your corner that has a keen eye for solutions to improving credit scores in an effort to get the best interest rate possible.

Interest rates associated with various loan programs are broken down into schedules based on credit score ratings. While each lender has its own guidelines, it’s safe to assume that as the consumer’s credit score goes down, interest rates will go up.

A borrower with an outstanding credit rating will get what is called an A-paper loan. This type of borrower is rewarded with a lower interest rate because they have a proven track record of using credit sensibly and paying their bills on time.

Loans designed for consumers with less-than-perfect credit – sometimes referred to as “sub-prime” – can range anywhere from A-minus, B-paper, C-paper or D-paper loans. Read the rest of this entry »

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Credit remediation is a subject consumers often face with fear and trepidation, and for good reason. With the exception of recognizing that the best score wins, the average home shopper knows very little about the whole credit scoring process. Sub-prime borrowers who are eager to move into A-Paper territory often find themselves at a loss when trying to find ways to upgrade their credit history. The good news is there are ways to improve less-than-perfect credit scores and obtain a loan for the home you really want.
 
The first step in the process is making sure that you have a current copy of your credit report. Congress recently amended the Fair Credit Reporting Act so that consumers may now receive one free credit report annually. There are three major credit bureaus: Equifax, Experian, and Transunion. Since entries can vary across bureaus, you’ll want to request a free report from each of the three companies. (Go to www.annualcreditreport.com)

It’s also important to know just what a good credit score is. Most A-Paper scores generally begin around 680, although this number may differ slightly among lenders. Don’t despair if you come up shy, there is always room for improvement. Increasing your score just 5 points can save a significant amount of money. Read the rest of this entry »

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