Second Mortgage for our House

Colorado, or also known as the "Springs" is one of the nicest states to live in. Perfect winter conditions in most of the cities, and beautiful springs. Colorado is home to many modern cities, and a diverse culture. Many people are interested in moving to Colorado, but few are aware of the idea of having a second mortgage. A second mortgage is a second loan that is subordinate to another loan on he same property.

The first mortgage is paid before the second one, making it more of a risk factor. In most cases a second mortgage takes the form of a home equity loan. Generally when you apply for a second mortgage lenders look for these 4 things; significant equity in the first mortgage, low debt to income ratio, high credit score, and a solid employment history.

Most lenders look at the equity of the first mortgage on the property to determine if they will lend you the money for your second mortgage. If you have a good equity in your first loan then you should have an easy time finding a lender. Significant equity in your first loan will most certainly ensure someone will loan you for your second mortgage.

Another thing that you need to get a second mortgage is a good debt to income ratio. For example, if you make $2000 a month, and have $400 in mortgage expenses, $200 for insurance, and $150 in taxes then your debt to income ratio would be %37.5. Determining your debt to income ratio is fairly simple, and free. You compare all of your housing debts, including your mortgage expenses, taxes, and home insurance, compared to how much your monthly income is. So, take your monthly expenses and your monthly income, and divide them. In addition, having a high credit score will help you secure a second mortgage. Credit scores are determined by a few factors. Your past credit uses, the number of times you as for credit, and your past delinquencies all are factors that determine our credit score. The higher your score is, the better it is for you. Credit scores ranges from 300-900, most people are in the 600-700 range. To secure a second mortgage you would want your credit score to be at least 500, but it should be 600-700.

Lastly, a solid employment history places a part in getting a second mortgage. For example, if you tend to move from job to job frequently, then you will be quickly over looked for getting a second mortgage. If you happen to hold on to jobs for years at a time, then you will have an easier time getting second mortgage. For example, if you held your first job for 5 years, and you are in your second job for your 6th year, then you should be set to get your second mortgage. All in all, a second mortgage is an option many people look to use. Before you try to get a second mortgage in Colorado, check the above things, and make sure you will have a good chance of getting the loan.

Cruel Fate

Home repossession is one of the worst predicaments fate can throw anyone's way. Yet home repossession is a reality many people are having to live through, what with the current hard financial times which have caused many people to fall behind in their mortgage repayments. Nonetheless, faced with the gloomy prospect of home repossession, one need not throw their hands in the air in despair. There are some steps which one can take, to stop repossession, and save oneself the stresses that come with the forceful eviction which is likely to result from the home repossession, or at least ensure that they get a reasonable (market) price for their house.

Faced with the prospect of home repossession, many people panic, not knowing that there are companies that are established for the specific purpose of helping people in their predicament. These are companies which, approached with a client who is faced with repossession, can buy the house in question on short notice and at the going market prices or near offers. The money you get from selling the house to these sellers can then be used to repay the mortgage balance, and the balance might possibly be enough to pay the deposit on another home, thus saving the home from the sad prospect of destitution. If you can, selling your house to these companies is almost always better than letting it get repossessed. If your house is repossessed, it means that you have essentially sold your home for the balance on your mortgage - or whatever debt might be in question, and this is more likely than not to be a pittance compared to the market value of the house.

You might also consider refinancing your mortgage in a bid to forestall home repossession. If all that has happened is that you have fallen behind in your mortgage repayments, and your credit history is otherwise good, you might be surprised with the ease with which you can get a financier to refinance your mortgage. Of course refinancing the mortgage is just a short-term measure, but it can help you avoid the horrors of home repossession, especially if you (objectively speaking) see your finances improving somewhere in the future. Additionally, refinancing you mortgage is also likely to save you from the ruin to your credit history that letting your mortgaged house get repossessed is likely to cause you.

Then there is the albeit dim possibility of talking with the creditor who is threatening to repossess your home into delaying the repossession. Generally speaking, creditors don't like the messy idea of home repossession and they only do it when the probability of your repaying what you owe them seems very small indeed - which they largely deduce from your attitude. Renegotiating the repayment period with the creditor might just buy you the time you need to put your finances in order, giving you the chance to service your mortgage or whatever debt it might be in time. Even when the prospects seem dark; you can still talk to your creditor and see what they have to say about the possibility of a renegotiated payment. By doing so, you have nothing to lose, and you have a home to possibly spare.

Of course in order to be able to stop repossession through any of these ways, you will have to avoid falling into a panic and get acting instead. Remember, the faster you act, the more options you have, as these things take time. And conversely, the more you delay, the more you cut your options.

FHA Streamline Refinances

The FHA or Federal Housing Administration has used the FHA Streamline as a primary tool to provide insured mortgages for families to purchase or refinance homes or properties. The Streamline(K) is a simplified version of the 203(K) to address specifically to smaller needs of individuals in terms of repairing homes and properties. Understanding the features and characteristics will help marketing for FHA Streamline refinances easier and more effective.

Basic Requirements

1.Get The Necessary Items.

The streamline pertains to the amount of underwriting and documentation to be processed by the mortgage company, costs may still be involved. Some of the needed items include the FHA-insured mortgage to be refinanced, current (not delinquent) mortgage to be refinanced, no cash taken out on mortgages refinanced via the streamline refinance process and the refinance leading to a lower borrower's monthly principle and interest payments.

2. Learn How Refinancing Is Offered.

Streamline refinances may be provided by companies differently. Some offer "no cost" refinances which do not require out-of-pocket expenses from the borrower. A higher interest rate on the new loan however, may be charged compared if the borrower paid or financed the closing costs in cash. All closing costs incurred during the transaction are paid by the company with this type of premium.

Closing costs may also be included into the new mortgage amount for some companies marketing for FHA streamline refinances. This is possible if an appraisal confirms that there is sufficient equity in the property. Streamline refinances can be done without the use of appraisals, but the new loan amount cannot go beyond the currently owed amount.

Investment properties or properties which the borrower does not consider as a principal residence can be refinanced without an appraisal required. Closing costs, in effect, may not be included in the new mortgage amount.

The "no cash-out" loan can be used to buy out the equity of an ex-spouse as long as it is documented in the divorce papers. The equity is considered indebtedness. Properties purchased not more than one year ago and are not FHA loans can lead to the amount being the appraised value plus closing cost, or the original sales price plus closing cost. Searching for Benefits

3. Identify The Advantages

FHA refinancing programs include repairs completed after closing with loan proceeds. It offers low down payment with a minimum investment of only 3%. Other advantages include loan fees that may be financed, the mortgage being FHA-insured, no inspection required, no general contractor required, being a great tool for REO or Real Estate Owned properties, mortgage amount may be increased when combining Streamline(K) with EEM or Energy Efficiency Mortgage and having a single loan amount for the purchase, refinance and repairs. FHA streamline is not for purchase transactions only but can also be used for the refinance of an existing loan or purchase or HUD REO property. The owner or homebuyer is responsible for all repairs from the proceeds of the loan. The repairs can start after the loan is closed.

Since the repairs are only minor, a general contractor is not required. You can hire one or perform the tasks yourself, provided you present to the lender your ability to perform the needed refinancing properly. An FHA inspector is not required provided that the homebuyer can show receipts or proof of satisfactory completion.

4. Identify the Necessary Repairs.

Marketing for FHA streamline refinances require you to know the type of items eligible for repairs. Inclusions are replacement or repair of roofs, gutters and downspouts, HVAC system upgrade or repair, plumbing and electrical system repair, replacement or upgrade, repair or replacement of existing flooring, minor remodelling, exterior and interior painting, weatherization like storm doors and windows and insulation, appliances not exceeding $2,000 in total after the required minimum of $3,000 of eligible items for repair are satisfied, non-structural improvements for disabled person accessibility and basements and exterior decks. Items that require structural modification or major rehabilitation are not included. If major repairs are needed, the homebuyer should opt for the regular FHA 203(k) program. A maximum of 2 payments may be made to the homeowner or contractor during refinancing. Any FHA-approved lender can process the mortgage loan. Most of the loan fees like title update costs, permit costs and origination can be financed in to the loan. Always point these out when marketing for FHA streamline refinances.

Facing Foreclosure Over the Country

Foreclosure is the legal right of a mortgage holder to gain ownership and sell the property to pay off a mortgage. This process has been carried out for years but changes in laws have enabled the property owners to pay off mortgages and avoid foreclosures. In the past the law favored the mortgage holders most by allowing a "Demand Notice", as failure to pay a mortgage would automatically gain the mortgage holder the ownership of the property. Certain changes in the U.S. laws allowed the borrowers to pay off mortgages before their property was taken away. In the United States, different states have different rules, but the basic foreclosure law is the same in

Most individuals take home loans while purchasing a house. As a security, the property is mortgaged by the lending institutions. The foreclosure process begins when the homeowner fails to make the due payments or installments. In such situations, the lender has every right to recover the investment. On the other hand as an owner, you cannot afford to sit back and let the foreclosure happen without a fight. A foreclosure can easily affect your credit in the future so you must find options to avoid a foreclosure. An impending foreclosure may be due to several reasons such as unemployment, terms of the loan, medical challenges, and even death. In any case, a foreclosure can be a frightening situation and you need to solve the problem before it is too late. You have the option of borrowing money from your friends or relatives, convince the lender to allow you more time, or if possible sell other property to avoid the foreclosure. You can even consult with a lawyer for help through the law. However, in any case, foreclosures are difficult to handle and the best option is to get help.

The types of foreclosure include foreclosure by judicial sale and foreclosure by power of sale. The judicial sale foreclosure involves the sale of property under supervision of a court. This type of foreclosure is available in every state of the U.S. It is usually a lengthy process and the decision is made after a short trial. However, one positive thing about this type of foreclosure is that it at least allows the owner a few days to clear the mortgage. The power of sale foreclosure is a little more harsh on the owner because the sale of property is not performed under the supervision of a court. In addition, this type of foreclosure method is prominently used by many lenders because it is effective and a faster process than the judicial sale method but thankfully it is not allowed in every state.

The types of foreclosure include foreclosure by judicial sale and foreclosure by power of sale. The judicial sale foreclosure involves the sale of property under supervision of a court. This type of foreclosure is available in every state of the U.S. It is usually a lengthy process and the decision is made after a short trial. However, one positive thing about this type of foreclosure is that it at least allows the owner a few days to clear the mortgage. The power of sale foreclosure is a little more harsh on the owner because the sale of property is not performed under the supervision of a court. In addition, this type of foreclosure method is prominently used by many lenders because it is effective and a faster process than the judicial sale method but thankfully it is not allowed in every state.

Foreclosure Prevention Act of 2008

The Foreclosure Prevention Act of 2008 is currently a bill in congress aimed at helping homeowners avoid foreclosures that result from the recent problems in the home mortgage industry. As of this writing, there is a Senate version and a House of Representatives version. To become law, one final version will have to be settled on by both houses of Congress and then be voted on. Numerous amendments have been added to both versions of the bill which may or may not change the final bill. However, both of the versions of the Foreclosure Prevention Act of 2008 contain several provisions to aid homeowners.

The passing of either bill will provide the following: * Federal bankruptcy judges would be allowed to renegotiate the terms of mortgages that are about to go into foreclosure. This would allow homeowners to keep their homes and avoid foreclosure. * Additional funding would be provided to allow the issuing of more tax-exempt mortgage revenue bonds. These bonds would be used for refinancing sub-prime mortgages and aid in the prevention of foreclosure. * Provide funding for the creation of community development boards that will repair foreclosed homes. This is designed to speed the sale of foreclosed homes and thereby reduce the total number of foreclosed homes on the market. * Give a $7,000.00 tax credit to people who purchase foreclosed homes. This provision is also aimed at reducing the total number of foreclosed homes on the market.

Bankruptcy Laws

The changes to the bankruptcy laws and the proposed tax credit are generating the most debate about the Foreclosure Prevention Act of 2008. Critics argue that these provisions could actually harm the homeowner and possibly prolong the mortgage situation. Under current bankruptcy laws, a judge may not alter the terms of a mortgage on a person's principal residence. The bill would allow judges to change the interest on a mortgage to the rate charged by the Federal Reserve Board plus a reasonable addition for extra risk to the lender.

Critics argue that this is merely a bailout for lenders without providing much relief for homeowners. They also feel that this part of the bill would devalue existing contracts and might well reduce the amount of mortgage credit available. This in turn could actually extend the time required for a housing market recovery.

Tax Credit

Critics of the tax credit argue that it distorts the true market value of a home. A foreclosed home, with a $7,000.00 tax credit attached, would now become more valuable than a home of identical value that is owned by a person who is current with their mortgage. They also feel that this tax credit might encourage some lenders to accelerate the foreclosure process and hesitate to negotiate with homeowners in financial difficulty.

Conclusion

At first reading, the Foreclosure Prevention Act of 2008 appears to be well intended and to have some provisions that could provide some real relief for beleaguered homeowners. However, critics of the bill raise some very real concerns about some provisions. These items need to be addressed. If this is done properly, the final law could speed the recovery of the home mortgage industry and prevent a large number of foreclosures.