Home Mortgage and Refinancing

Can I Stop Foreclosure with Bankruptcy?

Mortgage Maven — Fri, 27 Jan 2012 21:25:08 +0000

When filing for bankruptcy, foreclosure proceedings that have just started can be stalled as payment plans are negotiated. Depending on the circumstances, filing for bankruptcy also halts existing foreclosure proceedings until the bankruptcy court hears the case and starts liquidating assets.

Chapter 7 Bankruptcy

In Chapter 7 bankruptcy, the borrower’s assets are liquidated to pay back the debts. Filing for Chapter 7 bankruptcy places a stay order on the home’s foreclosure. Depending on state law, the home may be saved and kept if it is mostly paid for, affordable based on the person’s current income and does not have a high value. However, this depends on the location of the person’s legal residence, the value of the property and the equity within it.

Bankruptcy under Chapter 7 requires an income means test. If the borrower has a current monthly income greater than the state median, a means test is run. The means test determines whether the bankruptcy court thinks you have enough income after paying your necessities and outstanding obligations to pay the current debts.

Speak with a Minnesota bankruptcy lawyer to ensure that all debts, required expenses and income sources are properly accounted for in the means test. You do not want to file for Chapter 7 bankruptcy and then be rejected due to an incorrect formula on your ability to pay. If the court rejects the bankruptcy case due to the income test or means test, your creditors can resume foreclosure.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy involves setting up a debt repayment plan. As long as the bankruptcy includes all mortgages, liens and lines of credit against the house, the house is part of the debt repayment plan in Chapter 13. If the home owner forgets to include a lien holder against the home or a line of credit that they have used, that creditor can still foreclose on the property. And they can do so even when the remaining creditors are being paid. Minneapolis bankruptcy lawyers can assist you in setting up the repayment plan properly.

Speak with a Minnesota bankruptcy lawyer before you attempt a short sale of a home during bankruptcy. Done correctly, the short sale of a home can reduce the outstanding debt load while preventing a fire sale of the property. Done incorrectly, the short sale can result in additional debt or creditors not being properly paid and a bankruptcy case

Second Homes

Second homes are not protected under bankruptcy law like primary residences. If you own a vacation home, it will be sold to pay your debts. Time shares may generate legally required payments and even debts but rarely have market value. Time shares will likely require inclusion in your debt repayment plan while being sold at a loss.

Investment properties are also fair game for liquidation unless you can negotiate a payment plan or sell the property before the bankruptcy. You need to work with Minneapolis bankruptcy lawyers to arrange the sale of investment properties for as much money as possible. Minneapolis bankruptcy lawyers under Chapter 13 may be able to help you set up a rent to own arrangement with the current tenants to minimize your losses or maintain cash flow from existing rental properties to pay off your own debts. For those running multiple rental properties, Chapter 13 bankruptcy may be an option to save the homes and the cash flow from them.

Will my utility services be affected by bankruptcy?

Mortgage Maven — Fri, 27 Jan 2012 21:21:06 +0000

When going through a bankruptcy, the disruption to daily life ranges from liquidation of assets to dealing with court dates. However, another question can arise. Will my utility services be affected by bankruptcy? Can I keep the lights, water and phone on while going through bankruptcy?

•   If you owe money to your utility company and have not paid the bill in several months, most utility services can turn off the services for non-payment. There are a few exceptions. For example, electricity cannot be turned off to a home where someone is medically dependent on the power supply such as a ventilator. However, this exception can only be utilized when there is a medical certificate on file with the utility company.
•   Your utility services typically will not be shut off if you enter into a payment plan within the bankruptcy to pay back your current bill and accumulated debt.
•   Utility assistance programs exist for electricity, gas, heating oil and telephone customers. Utility services may be available at a discounted rate if the person going through bankruptcy is now considered to be at poverty level or living on a fixed income. These programs often allow those with limited incomes to pay a reduced rate for their utilities. Others, such as “lifeline” phone service, permit free access to basic utility services such a local phone line with 911 service or internet hook-up to those with a government provided computer. Someone going through bankruptcy due to income loss or medical hardship should contact the utility to negotiate a payment plan at a reduced rate. A Hawaii bankruptcy lawyer can provide guidance on local utility assistance programs in your area.
•   If your utilities were turned off and you enter a payment plan, your utilities will usually be restored.
•   Those who qualified for utility assistance programs often qualify for deferred payments for outstanding utility bills. This does not eliminate the utility service debt as would occur if it were discharged in bankruptcy. And seeking deferral of payments can be interpreted as reaffirmation of the debt and a promise to pay. Seek legal guidance from a Hawaii bankruptcy expert before asking for deferred payments of utility debts.
•   Those who are going through bankruptcy after job loss or a medical hardship can seek charitable assistance in paying their utility bills. If the charity pays the back utility bills, the individual no longer owes the debt. If the charity pays the current utility service bills and reconnection fees, this may get the lights and water back on. However, it is still the debtor’s responsibility to either include the utility debt in the bankruptcy or enter a payment plan with the utility company. If the utilities are turned back on due to charitable assistance, the individual must still come up with a way to pay for the next month’s utilities and enter a payment plan for the outstanding debt. Failure to do so creates the risk adding to their growing utility services debt and a second shut off of utility services.
•   What happens if a family member co-signs on the utilities to get them turned back on and you declare bankruptcy? The family member then becomes liable for the utilities. The utilities will typically stay on as long as the family member continues paying the bills.

Equity Release Mortgage: The Best Option for your Retirement Years

Mortgage Maven — Thu, 12 Jan 2012 18:29:22 +0000

Have you ever wondered why many people are reluctant to put up their homes as financial investments during their retirement years? Do they really understand how their properties can literally work for them so that they can reap the benefits, and live the way they always wanted?

There are many rumors and false myths that sets fear and doubt in the minds of our retirees. Many believe that they would lose their homes and have no place to stay when they place their property as collateral to loans. Some say that when they pass away, their surviving families and relatives will shoulder their debt, one of the reasons why they are reluctant to invest. All of these are not true when it comes to making financial investments through equity release mortgage.

Equity release is a cash loan which gives the retiree the needed funds that they can use during their retirement years. They put up their home as collateral; however, they can continue to live in the comfort of their home for as long as they want. The only time that financial institutions can get hold of the said property is when the retirees’ pass away, or chose to move to another home or care facility. Based on these scenarios, the cash loan will be deemed fully paid by virtue of the value place on the property.

On the other hand, buy to let mortgage gives the retiree the option to choose the specific real estate property that they want in the private rented sector. Once the property is purchased, it can now be turned into an earning investment by leasing it to tenants. The basis of the cash loan amount may vary depending on the profitability of the property being bought.

Take time to review all possible investment opportunities before making your final decision. What you do now will definitely affect the outcome for your future.

Two Ways to Buy a Bank Repossessed RV

Mortgage Maven — Wed, 07 Dec 2011 09:21:14 +0000

During a recession, people want to keep as much money as possible. The reason why so many people invest in gold is because there is a lot of instability. But gold always provides you with some value so it is a good investment for some people. During times of war, or an oil crisis, there is always a rise in the demand for gold because people are trying to stash their cash in a place where the government won’t be able to find it

There are essentially two different ways to buy a bank repossessed RVs. The first way involves you to do a little bit more work, but the result is that you are not going to have as much strength competition when you are buying your next RV. If you buy a bank repossessed RV directly from the bank, there is less competition from other buyers. In order to find bank repossessed RVs for sale before an RV auction, you’re going to have to call around local companies that sell RVs. Ask them if they have any cars or RVs that they have repossessed and that they would like to sell. Some banks will work with you and some won’t. You’ll never know unless you take the time to call them and ask them. I have generally found better results with credit unions because it is easier to talk to the person who is in charge of what I am doing.

There are some advantages to waiting for the RV auction itself. One of these advantages is that you may be able to look at other different inventory at the same time, before you buy. The other major advantage is that you may actually be able to buy the car or RV for less if there are not very many people present at the auction.

Know When to Buy Travel Trailers and RVs Before They Go Through Foreclosure

Mortgage Maven — Wed, 23 Nov 2011 02:25:08 +0000

When you’re trying to get the best deal on a used RV or travel trailer, you should know that the best way to find a good deal is to buy these RVs when they are in pre-foreclosure. Welded seller receives a notice that they are going to be foreclosed on; they do one of two things. Either they ignore it, or they try and sell their RV as quickly as they can. People that are smart go for the second option. They know that having a foreclosure on their credit is very bad. They want to be able to sell their RV so that they do not have to go through foreclosure. Typically the bank is also motivated to sell repossessed RVs. Here is an opportunity for you to short sell the bank and maybe also the seller. You can get a great deal, and you can help them solve their problems of spending extra money in keeping foreclosed RV and also help them get rid of it.

Once an RV gets foreclosed, it becomes a repossessed RV. Repossessed RVs are then taken and sold to the highest bidder at RV auction. RV auctions are also a great way to buy a used RV. At an RV auction, most of the time the entry bid is very low. When there are a lot of people at auction, these goods can get bid up very quickly. But when there are not very many buyers, or there is a time and a ton of inventory, sometimes it is possible that the owners will not bid more for the RV than they think that it is worth. It really wouldn’t make sense to pay more for an RV that it is worth. Most of the time, RV’s auction sells for far less than market value.

4 Warning Signs That You’re Mortgage Is In Trouble

Mortgage Maven — Tue, 01 Nov 2011 19:10:12 +0000

Here’s a look at 4 reg flags that might indicate your financial habits are in turmoil and that your mortgage will be in trouble very soon. If any one of these describes your current situation this should raise concern. If you find yourself in a position where you’ve done more than one or all of these things than it’s critical you meet with a financial specialist and see if you can straighten out your life as any day now you will likely hit rock bottom.

1. No Money for Maintenance
If things are breaking down in the home but there’s no money to be found to fix them, this is a sign your money is too tight. As an added penalty, all those repairs needed ultimately bring down the value of your home until they are fixed, and it is not rare for one problem to lead to another, more expensive problem.

2. Needing Cash Advances To Survive
If you find yourself getting a cash advance to pay for your groceries, your power bill, or worse yet, your mortgage itself – and doing this often, this is a huge red flag that you’re in danger. Not only does it indicate a lack of financial reserve, but every cash advance is a small loan to be paid off and they are almost always attached to a horrifying interest rate.

3. Cashing Out Your IRA/401k
Pulling the cash out of your retirement fund not only robs you of precious dollars (and the loss of interest on those dollars that otherwise would be) for your retirement, but it’s a warning sign that you do not have the money to pay your bills. Usually this is the last step people take before losing their home so if you’re at this point, your mortgage is probably teetering on the edge.

4. Your Credit Cards Are All Full
Credit cards give us easy access to money which obviously gets a lot of people into trouble. If the credit cards are all maxed out because you didn’t have the money around to pay the bills, this is dangerous in two ways. It means you’ve lost your easiest source of loaned money and it means you’ll be paying a lot of money in the the form of loan interest.

By Wardrobe Closets and Home Editor, DeAngelo Sage.

3 Tips to Get a Better Home Loan

Mortgage Maven — Wed, 12 Oct 2011 04:09:05 +0000

With our current market and current economy owning a home is not as easy as it used to be. It is no longer a buyers’ market and mortgages can be hard to come by, especially if you have a spotty credit history. There are a few things you can do to better prepare yourself for your home loan, these tips should save you some serious money, but don’t apply to those looking to buy a second home.

Learn how a mortgage works and as much about the process as possible. You see mortgages are not as straight forward as your typical car loan. They may seem similar at first, as they both require a down payment and charge your annual interest on top of your monthly loan payments. There are several common types of mortgages, and couple of uncommon ones. If you have poor credit you may want to look for a bad credit mortgage broker to help explain the differences between all the types of home loans. Don’t get caught up like my buddy who after paying his mortgage on time for 5 years is getting foreclosed on because his interest rate was adjusted and he can no longer afford to live there.
Make the effort to fix as much as your credit as possible, even if this means waiting a year or two. Just a raise your credit rating a couple of points can save you thousands of dollars and be the difference between an affordable mortgage and one you can’t afford. So definitely pay off and outstanding debts and try to remove any negative items on your credit report. You also may want to ask your credit card companies to raise your limit. The higher your credit available is to your actual debt, the better your credit score range will be. Don’t overlook this even if you qualify for a bad credit home loan, as bad credit loans can add up to a substantial sum at the end of 30 years.
This may seem simple but overlooking this last step is what causes a lot of people to lose their homes. Make a budget of what you can afford to pay every month and shop for a home based off that number. There are way too many people who try to fit their budget around their mortgage payment instead of the other way around. It may mean a smaller house, or one slightly different than your dream home, but it may also mean keeping your home.

Following these tips should help you find and keep your perfect house, as house you can call home for a long time. Just remember this is the biggest purchase of your life and definitely deserves the time and effort you need to put into it. Thanks for reading.

3 Reasons To Get A 15 Year Mortgage

Mortgage Maven — Sat, 01 Oct 2011 22:48:04 +0000

Lately, I’ve been it the process of buying a new home and as part of that I’ve consider different types of mortgage programs that would best fit my situation. One program I’ve been leaning towards a lot is the 15 year fixed mortgage rather than the traditional 30 year fixed mortgage. So in this article I’m going to list 3 major benefits to getting a 15 year mortgage.

Less Interest

First off, when we compare a 15 year mortgage vs 30 year mortgage we will pay far less in interest with this type of loan. In fact I recently ran a comparison of a $120,000 mortgage and found that by going with the 15 year mortgage I would save over $55,000 in interest. On top of that I also found that lower term mortgage such as the 15 year mortgage will carry lower interest rates than a 30 year mortgage.

Less Interest Per Payment

The next reason to consider is the payments. Obviously, with a 15 year mortgage the payment will be higher than a 30 year mortgage however with a 15 year mortgage you will pay far less in interest. In fact with a $120,000 loan more than half of the payment will go towards the principle portion of the loan, which is great.

While with a 30 year fixed mortgage nearly 80% or more of the payment will go towards the interest in the first 5 to 10 years of the loan. In fact it will typically take till year 15 of a 30 year loan to pay just half the payment towards the principle.

Pays Down Faster

Finally, the last big reason to consider a 15 year mortgage is because it pays down a whole lot faster. In fact if you would make a $1000 payment on a $120,000 mortgage you would pay off the 15 year mortgage nearly a half year sooner even though you are paying off the same amount of money. The reason for this is because lower term mortgages have smaller interest rates. In fact the current rate on a 30 year fixed mortgage is around 4.25% while a 15 year fixed is around a 3.75%.

One Final Thought To Consider

In the end a 15 year mortgage is one of the best mortgage deals around so take advantage of it if you can. However I also need to stress one warning with the 15 year mortgage, if you can’t afford the payment that comes with it I suggest you go with a 30 year mortgage instead. Having a payment you can’t afford is to big of a risk to bare because it could cost you your house if you’re not careful.

Suggested IRA Investments for This Year

Mortgage Maven — Sat, 03 Sep 2011 16:36:04 +0000

Investing in your future is something that is very beneficial for you and for your family and loved ones as well. When we are still able and working or having our own business, we tend to go for and invest for basic needs like clothing, food, education and shelter. More often, people invest in business or save their money in banks to be prepared for the “rainy days.”

Most people will also go for mortgages to get a house or car for themselves. When lenders underwrite your loan, they calculate your insurance and property taxes as if they were paid monthly. This calculator does the same thing. Of course, you may have to mentally add mortgage insurance, if required, and Homeowner’s Association Fees. This calculator is called a PITI calculator or can also be a mortgage calculator with taxes.

For other individuals who have paid for their respective mortgages and loans, they have IRAs or Individual Retirement Accounts that they also use to invest to secure their future. There are even alternative forms of ira investments that we can choose from this 2011.

They say that when investors think of an Individual Retirement Account, they often think only of the stocks, mutual fund, money markets, bonds, annuities and CDs that they already know they can invest in within the IRA. But there are alternatives to these. These alternative investments are becoming an increasingly popular choice for those seeking to invest their retirement plan assets. These non-traditional investment vehicles range from the familiar – for example, limited partnership units – to the not so common, such as real estate investments.

There are risks involve when you go for real estate investments. Experts would say that your IRA can’t take out a mortgage so you’ll have to buy the property for all cash.And the tax deductions normally associated with real estate are no good to you if you buy the property in an IRA.

In the end, we need to secure our IRA assets. A thorough research on any investment will surely take you a long way.

The Credit Life Of A College Student

Mortgage Maven — Fri, 26 Aug 2011 02:30:07 +0000

Students all over the world will encounter college student credit problems, and the problem with today’s generation is that students have no idea how to avoid them. The credit card companies love to target college students because most are very irresponsible and are just beginning to start out their adult lives.

When a college student enters the school that they have been waiting to attend, they are then bombarded with instant access to college student credit cards. The problem with these credit cards is that they are designed to make money off carried balances which can drive a college student into life-long debt. These loans and debts eventually becomes thousands and thousands of dollars by the time the student graduates. Once the student gets the job that they have been working four years to obtain, now takes a backseat to their debt. This becomes a problem because this may affect their credibility to obtain excellent credit score rating which will affect their credits.

Young people these days will have a hard time saying no to temptations as “free money” is right there in their pockets. What students don’t understand is that this is money that they do not have, and eventually will fall in the hands of their parents. Parents have a hard time controlling their kids as they are finally coming of age, and the students now take on a life of their own. It was the parent’s responsibility to raise the kids to be responsible children, so that when they finally go to college, they will know how to act.

One of the best ways to get a child ready for the adult life is by giving them summer jobs. When a child is spoiled and just “given” money, they tend to forget how hard it is to earn money in this ever competitive world. A short talk with your children about money and how to be responsible with their money can avoid college student credit problems in the future. So if you have a child in high school, get ready for the future challenge that you are about to encounter.