CBS 6 Answers Team: Mortgages
MORTGAGES
DREW AIELLO
Best Interest Mortgage (Clifton Park, NY)
518-877-7575
www.bimc.com
Below are some of the questions sent to Answers Team member Drew Aiello during the CBS 6 live web chat Wednesday. Stay tuned for more from the Answers Team in the coming weeks!
CBS 6 VIEWER: The majority of my monthly mortgage payment is esrow. I am having trouble paying on time. Would it be wise to separate my taxes from my mortgage in order to preserve my credit? Also, I am 9 years into a 30-year mortgage. Is it ever a good idea to refinance back to 30 years to lower my payment?
DREW AIELLO: If you feel that it would help your monthly cash flow, it may be a good idea. I would only recommend this if you are a person that receives bonuses or big commission checks throughout the year on top of your salary. My fear would be that when the tax bill came you would not have the money to pay the bill and you may dig a hole with back taxes. I would also recommend that you always take the lowest monthly payment you can possibly achieve. This will help with cash flow throughout the year and remember you can always pay more when your financial picture improves down the road. I hope this helps.
CBS 6 VIEWER: Our house is paid in full and is in trust to our children. Can we get a home improvement loan, and if so, from which banks? We have good credit and are in our early 60's.
A-TEAM DA: It would depend on what type of trust you have - but it can be done. If it's a Medicaid trust, you may not be able to penetrate the asset, which is the home equity. Check with your attorney before you do anything so you don't violate the trust. Also, depending on your financial picture, you may want to consider a reverse mortgage so you can avoid having to make payments on the money you draw out. SEFCU has a great home equity product if you decide to go this route.
CBS 6 VIEWER: What is the maximum mortgage available in the Ballston Spa area for an FHA or Fannie Mae mortgage?
A-TEAM DA: You may be able to get 100% financing through a rural housing program up to 417K. FHA will let you go up to $312,500 with only a 3% down payment. There is an income qualifier for the USDA 100% program but the FHA does not have any income limits. FNMA limit is also at $417,000 and you can go up to 95% financing. I hope this helps.
CBS 6 VIEWER: I hope that you are able to provide some assistance. I entered into a purchase agreement for a new construction in Queens, NY and secured a commitment letter on March 2007. Now I no longer have a mortgage and the attorney for the developer stated that they will keep my down payment as liquidated damages ($65,900), even though I have been diligent about going with their preferred lenders. My attorney has requested to return my deposit since there is documentation that I have been diligent with my efforts - unfortunately, the mortgage industry has changed and the developers did not get the house ready until June 2008
A-TEAM DA: I believe you should be able to get you money back because you have made every effort to obtain a mortgage especially if you went to the builder's preferred lender. The only issue you may have is if you didn't alert the builder in a timely manner. Your attorney can better assist you in that regard. I lend down there so if I can be of assistance let me know. Good luck but I feel you should get your deposit back.
CBS 6 VIEWER: I'm a first-time home buyer interested in a mortgage between 150-200k. I am in my early 30's, I have a secure job in healthcare (2 jobs) making about 50k net personally and I am married with one new child. My wife works and makes about 38K net. We have a few thousand in savings but not much more, and due to lack of credit history (we do not use credit cards), mainly, our credit rating hovers around 600. Is this goal within our reach at this time?
A-TEAM DA: Sounds possible. A credit score in that range is okay with FHA and the USDA program. With FHA you will need 3% as a down payment and with the USDA program, you may not need any money to purchase and you can roll in all your closing costs and some improvements to the home if need be. I would have to look at your other outstanding debts to make sure you qualify but that only takes a few minutes. Sounds good, and happy house-hunting.
CBS 6 VIEWER: I have listened you on Talk1300, and WROW before that. I have a credit score of 806, I owe about 50% of my homes appraised value (2 years ago), my mortgage interest rate is 6.375%. My question is, are mortgage rates low enough for me to refinance?
A-TEAM DA: Not yet. Right now rates are 5.75% on a 15-year and 6% on a 30-year mortgage so unless you have other needs other than lowering your rate it may not make sense. If you need money for debt consolidation or home improvements then it may make sense. Rates are at a point where they may be able to go a lot lower so watch it carefully, we may be able to drop to the mid 5's. We'll see.
CBS 6 VIEWER: My mortgage was taken over about two months ago by AHMSI (American Home Mortage Service, Inc.). Is that a bad sign? Should I be looking for another mortgage company?
A-TEAM DA: It's not a bad sign. Almost every mortgage these days gets sold to another lender or bank. Just make sure you send your payment to the right place. As long as your rate and terms are good for you, there shouldn't be a need to refinance out of your existing mortgage.
CBS 6 VIEWER: I have 12 years left to pay on one mortgage and about 10 left to pay on another. Should I combine the two?
A-TEAM DA: I would have to look at your current monthly payments and see if it would make sense. If you are able to save a good amount of money and pay it off sooner then it may make sense. There will be some closing costs so we have to make sure the monthly savings outweighs the costs involved and if we can shorten your term to 10-years on the whole piece then it may be an additional benefit.
CBS 6 VIEWER: Hi, I have looked into refinancing through my current mortgage company. I have a mortgage that the rate will change come May. I called yesterday to see if I could refinance with my income of $40,000. My husband is currently unemployed. I don't have a good credit score (586); however, in the three years I've had my current mortgage, I have not been late. They have offered me a 30-year FHA at 6.68. Do you think it's the best I can do right now? House is worth $162,000, and I will be financing $120000.00 with $6,300 in closing costs. Is this a good deal?
A-TEAM DA: That seems to be a good deal but you may be able to get a lower rate because rates have dropped over the last few days to about 6.375% or 6.5%. If you have an FHA mortgage currently you may be able to do a streamline refinance where they don't look at your income or credit just your mortgage history and they will lower your rate. Go over the closing costs and look to see if you are paying any points and if so ask why. Make sure you take a good look at the good faith estimate carefully.
CBS 6 VIEWER: Tried to refinance a first and a second mortgage to lower interest rates and monthly payments, but wasn't able to. Should I try again and are there any recommendations?
A-TEAM DA: It's a great time to consolidate both mortgages into one if you can because it will make your life easier, and you may be able to save a decent amount of money in the process. Also, some second mortgages are interest-only so it may work out where you can lower your payment and pay down principal in the process.
CBS 6 VIEWER: We filed a Chapter13 and are trying to get info on lower mortgage rates so we don't lose our home. Is there anything out there to help us? Our present mortgage rate is 6.8.
A-TEAM DA: If you are current on your mortgage and have paid the Ch. 13 on time you may be able to refinance into an FHA mortgage. This would allow you to consolidate the mortgage the Ch. 13 into one and lower your monthly payments.
CBS 6 VIEWER: I'm in the process of purchasing a home. I'm putting roughly 3% down. I'd like to avoid paying PMI and was hoping you could give advice on that. Thanks.
A-TEAM DA: The only way to avoid paying PMI in today's world is to obtain a USDA Rural housing loan if you are in a rural area. You would be surprised what areas are considered rural so go on the USDA Rural Housing web site and punch in your address to find out if you are in a rural zone. Also, PMI is now tax-deductible so it's not as bad as it used to be and will go away once you have 20% equity.
CBS 6 VIEWER: My daughter filed for bankruptcy and included her house in it. Instead of waiting for someone to come to her door, she moved out. So far, she has heard nothing from anyone - no notices on her house door. She called the mortgage company and the bank and has gotten no response. The house has been empty for over 3 months. We are concerned because of the cold weather and the pipes. Should she put the heat on? Who can she contact and get answers for this matter? Does she still have rights to this house? Where does she stand legally? Also, she owed back taxes on it and just last month she received a notice that the taxes were paid and her name was on the receipt, which she does not understand. Thank you for any help you can give me.
A-TEAM DA: It sounds like the mortgage company paid her taxes because a tax lien supercedes a mortgage lien. There is definitely a bank involved here so I would try to make contact with them as soon as possible. Keep the heat on a bit to avoid any major issues. Also, look at trying to sell the home as quickly as possible. They may sell it and come after her for the balance if there is one. Try to move fast to avoid any further fees or damage.
CBS 6 VIEWER: Hello, I am 25, single, and looking at purchasing my first home. I have excellent credit and have been pre-approved for $150,000 mortgage. My question is, who should I be going through to get my first mortgage, and what should I expect to make for a down payment? I have heard that I only need 3% down if you are a first-time home buyer.
A-TEAM DA: There is a program out there called the USDA Rural housing program that allows for 100% financing and the ability to roll in your closing costs. Go on the USDA web site and type in your address and see if your property is in a rural zone - you might be surprised. Work with someone you trust that has a good reputation. I like local people because you never know what you will get on the Internet.
CBS 6 VIEWER: I own a home in NYS and have an adjusted interest rate. I only owe 7 more years on my house - would it be a wise choice to get a fixed mortage?
A-TEAM DA: The big question to ask yourself is, if the rate jumped up, would you be able to afford your payment? With only 7 years left, you may not owe that much, and if the rate went up, it may not make a big difference in your monthly cash flow. Also, rates on ARM's should be coming down with all the lowering the Fed has done, so you may not have any near-term issues.
CBS 6 VIEWER: Would it be a good time to refinance my mortgage?
A-TEAM DA: Depends what your current rate is and how long you expect to be in the home. You have to weigh the benefits of a lower rate and the monthly savings with the closing costs. Most of the time, if you can lower your payment enough so that in 5 or 7 years you can be ahead of whatever costs you incurred, then it may make sense. You have to do the math.
CBS 6 VIEWER: If you have filed bankruptcy in the past year, can you still apply to have your mortgage lowered?
A-TEAM DA: The only way to do it is if your mortgage payment is current through all this. Otherwise you would have to wait until the BK has been discharged 2 years. Make sure you have reestablished credit and no late payments since the BK.
CBS 6 VIEWER: We have a construction loan and have a management company that has received draws from the bank - and now we have liens against the property and are at a standstill. We are paying mortgage, rent and storage and can't afford food, let alone a lien. Banks don't need lien waivers in NY? Any advice?
A-TEAM DA: Is the house built yet? The draws should have gone to the builder and to you, but it sounds like they haven't. Call the bank and call an attorney to get help and to get things moving again. This is unfortunate but get help fast.
CBS 6 VIEWER: What do you do when you can't afford your mortgage payment and the house isn't selling? We owe $372,000 plus realtor fees.
A-TEAM DA: Call the bank you are paying and let them know you are having trouble making the payments and see what they can do. The federal government is in the process of passing some legislation to enable home owners the ability to modify their current mortgage lower and reduce their payments. I may be able to give you some information on this as it comes available.
CBS 6 VIEWER: I plan to retire from my job within the next six months and am looking into reverse mortgages. Is it better to obtain a reverse mortgage now in 2008, or wait until 2009? I've heard through a not-so-reliable source that changes may be coming in 2009.
A-TEAM DA: The changes have already occurred. They increased the lending limits this month to allow for greater benefits. Now is a great time because rates are so low. Rates on reverse mortgages are less than 4% and the lower the rate the greater the benefits (money) that you are able to realize.
