A magicians true power does not lie in the ability to bend the laws of physics, rather it is hisor her power to get their audience to watch their right hand as the left one commits an act of deception with a sleight of hand maneuver. This power of illusion is the magicians true power. This power is also a common trait of con artist and unethical business practitioners. In the real estate world there have been quite a few magicians working the lending angle. This set up for the bait and switch mortgages usually involves disappearing funds from the potential Home Owner. Find your dream home, without paying more than you should.
So what is a “Bait and Switch” mortgage? It is a magic trick. There will be an advertised mortgage rate that very few people would qualify for, but because the company can offer it to some segment of the population it is a legal advertisement. This highly coveted, but unattainable percentage rate, is the bait to get you into the office.
Once you have applied for the rate advertised, you most likely will find yourself disappointed in the fact that you don’t qualify. The lender will engage you about your situation with a very empathetic approach. Then there will be an offer to finance at a different rate, higher than what was advertised.
Another area to watch out for are hidden fees. Remember to never sign anything until you have had all contracts reviewed by your attorney regardless of how “standard” the mortgage broker claims the contract to be. Also ensure that you receive an itemized list of all fees you are going to be required to pay.
A borrower should also track market trends while applying for a loan. There is a time difference between when a borrower submits their loan application and when the loan rates are actually locked in. The rates are subject to the changes in the market. the market rises, your rate rises. the market falls, your rate falls. In the event that the market falls, some brokers fail to change the rate so make sure there have not been any significant changes in the market between application and signing the papers.
One way you can safeguard yourself from unethical lenders is to check and see if they have been reported to the Better Business Bureau. Not all unethical companies are reported, but this is an excellent start for checking references. Another great way to determine what is the legitimacy of an organization is to ask to see the loan commitment letter from the lender who is locking in the rate on the loan. This is a legitimate request and buyers should not work with anyone unwilling to show the loan commitment letter.
Tags: buying a home, financing a house, fraud, mortgage, scam
You’ve worked so hard for your home. Made untold sacrifices to realize the American dream of home
ownership and for unforeseen circumstances the dream you built is threatened from dire economic conditions that threaten foreclosure. A feeling of helplessness envelopes your spirit and there seams to be no way out. Then miraculously you find help that is just too good to be true. As the old adage goes, “If its too good to be true, it probably is.”
There are numerous legitimate resources, local and national to help you avoid foreclosure, but avoid scams that ask you to put your financial future at risk.
Here are some popular scams cheating people out of their homes.
- Equity Stripping: In this instance a distressed homeowner is presented with a situation of being behind on mortgage payments. they are approached by a financier that offers a bailout. The homeowner is then advised to stop payment on their mortgage while the situation is being negotiated. Once the homeowner is facing immediate foreclosure the financier claims that the deal has fallen through for the bailout. At this point the homeowner is in a tough situation if they have not been placing their mortgage payments in escrow. Without the money to pay they are in even more desperate of a situation and the financier then says the homeowner must enter into a special program where the home is signed over to the financier or associate and the original owners will pay their mortgage back as tenants. The home is signed over but the financier never truly pays the mortgage and the homeowners loose everything.
- Quit Claim Deed: In this scenario you fall behind on your mortgage and enter another party offering assistance on to your home deed. Without consulting an independent lawyer, you could be signing over your home ownership rights while still holding on to financial responsibility for the home.
- Mortgage Liability. This is any situation that only deals with the actual deed or property. If you have reached an agreement for help it can be costly to neglect the fact that your deed and your mortgage are not one in the same. beware of any deal that treats the two as one entity without specifying how they will be dealt with separately.
Tags: foreclosure scams, home owner help, home selling, new home buying
Planning for your future takes a lot of forethought into what path is best for you. Your financial future
takes that same thorough review, but add math into the equation. For many, home values have been a major focus due to the enormous drop in home prices across the United States over the past couple of years. In a market that is in constant flux, many find the prospect of calculating their home value to be a depressing thought. While not every sector in the housing market has found home prices decreased, it does seam to be more the norm.
However the individual markets are doing across the US, the importance of getting an accurate estimated home value depends on your situation. If there is reason to believe you will need to liquidate your assets for any reason, then it would be beneficial to get an accurate home value. Another instance would be if you had decided to refinance your home. This is going to be a requirement of your financial institution in order to determine if the value of your home exceeds the amount you still own on the property.
A great way to get an idea for what your home is worth is to speak to a licensed real estate agent. A sellers agent is the best to have for selling your home and making sure you get the best deal for your home. A buyers agent can also give you excellent advice on what consumers in the market are looking for to help get an idea for what your home is worth.
You can also play detective by investigating what comparable neighborhood properties are being offered for and what price they are actually selling for. This information will give you an idea on what price range your home is in. Remember, the home must be in similar condition, offer the same level of amenities, luxuries, upgrades, and etc.
Tags: assessment, home buying, home selling, home value
Sick of the phrase “Tough Economic Times” looming doom over all the news surrounding real estate? Its hard to remain positive in challenging situations if the only information you receive is negative.
Yes, foreclosures are reaching staggering amounts all across the country. And, no its not wise to ignore the fact that banks are likely to increase their foreclosure rates and home repossessions now that President Obama’s housing plan has given clearer direction on which borrowers should be assisted. However, there is still action you can take to avoid this devastating scenario. If you find your self in this situation here are some creative ways to help pull your self through these “Tough Economic Times!”
The best remedy is prevention. If you have yet to purchase a home the best advice is to not only buy within your means but live there as well. All too often buyers have calculated their budget within an inch of its life. If you have not factored in savings for emergency then you are not doing the right calculations for your home mortgage. There are plenty of free budget and mortgage calculators to help you make the correct calculations.
Now, for those already invested. Remain calm if your mortgage is under water. If you owe more on your home than what it is worth the last thing to do is panic. Markets rebound and if you are still in the financial position to keep paying on your mortgage, you should. This is the best way to get your return on investment. Too many buyers whose financial situation has not changed are opting to get out of their mortgages because they are afraid they will loose more. Not true. Real estate is a roller coaster of ups and downs. If you get out on a low point you are only making a bad situation worse. The rule of thumb for home ownership is you have to be willing to invest at least 7-10 years in a property to see that return.
For those whose financial situations have turned for the worse here are some possible solutions for keeping your home going while waiting on a new job to offset your costs.
Work with your Lender
Ignoring your lender will do you no good. Even if you do not have the answers or solutions to your financial crisis, it is important to show your lender good faith that you have ever intention of making good on your loan. In fact if you see an issue arising don’t wait till the bank takes notice. Contact their Loss Mitigation Department to explain your situation/
Tags: avoiding foreclosure, home advice, home help, home owner help
Much debate on the validity of the $8,000 First time Home Buyer Tax credit has occupied the real estate community since the National Association of Home Builders Spring Board of Directors Meeting in May. During the Summit, US Housing and Urban Development Secretary Shaun Donovan announced that the First Time Home Buyer Tax Credit would be able to be used for down payments and closing cost. In a press release Friday, HUD has officially confirmed that the first time home buyer tax credit is now approved for use by FHA approved lenders for down payments and closing costs.
The FHA rule will allow state Housing and Finance agencies and certain non-profits to monetize the full amount of the tax credit in order to allow borrowers to immediately apply the credit towards down payments. The amount is dependent of the home cost, allotting 10 percent of the home cost as the mathematical equation for the credit, and is maximized at $8,000.
Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. As it stands, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent down payment. The law prohibits lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but lenders can now monetize the tax credit for use as additional down payment and closing costs. This assistance can help borrowers achieve a lower interest rate.
Tags: 8000 tax credit, down payment, home buying, HUD, news
“Strength is born in the deep silence of long-suffering hearts; not amid joy.”
~ Arthur Helps
Heartache is an inevitable part of life. It can shake a person to their core and destroy their sense of security. When love is lost, a sense of normalcy can seem too far away. A necessary step following a divorce is to start life over and find a place to call home. In some cases, divorcees will opt to rent while in other cases individuals choose buying a home instead. Buying a home following a divorce presents some important considerations that may or may not be in the forefront of your plans.
As with buying a home under any circumstance, before looking at the first house, individuals should obtain 
a mortgage pre-qualification. This will set the standard for what price range to look within. However, this will also present a chance to have your credit report reviewed. During the course of divorce proceedings liabilities, assets, and other responsibilities are divided and allotted to each party. In the case of credit debt, an innocent spouse can experience credit damage due to the responsible party’s lack of payments. If credit debts are still held jointly, even though the court has directed a responsible party, creditors will not know to exclude the other until they are directed. Contacting creditors following divorce to clarify who is listed will help ease the qualification process for buying a home and avoid any problematic errors.
Income is often affected through a divorce as well. Shortly after the finalization, confirm the income you actually realize to budget for your new mortgage payment. Buying a home will require some time and Read the rest of this entry »
Tags: divorce, home buying, move, new home, seperation
As the economy falters, so has home lending. In this position, home buyers often have to take rigorous steps to obtain a home loan and thus put themselves at risk going in on a home loan they are not best suited for. The US Department of Housing and Urban Development intends to help rectify the home loan dangers of potentially harmful loan offers by implementing mortgage reform. This reform will take place under the Real Estate Settlement Procedures Act, which will go into effect January 1, 2010 and save an average of $700, said Shaun Donovan, US Housing and Urban Development Secretary.
Another area of reform under RESPA is the restricted practice of ‘required use.’ This is the act of leading consumers to use mortgage services that are associated with affiliated businesses at a higher cost than unaffiliated competitors. This brand of persuasion often leads consumers that the suggested service provider is in their best interest when in fact it is a ploy to bring in business and in turn give a fee to the lender for the referral.
What does this reform ultimately mean? Lenders and mortgage brokers are going to be required to provide their customers with standard Good Faith Estimates that detail loan terms and closing costs in a language that is understandable. In addition, closing agents will be required to give buyers a HUD-1 Settlement Statement, which gives clear comparisons between estimated costs and final costs.
Tags: good faith estimate, HUD, mortgage
In a world gone mad, real estate prices have dropped so drastically that the game has changed for everyone. In a buyers market, you are in control of your new home destiny and there is a lot more power in your home buying dollar than a couple years ago. On of the growing trends among new home buyers is a wider playing field for haggling. While you most likely will not get your home pennies on the dollar, there are a bevy of incentives and advantages you can wrangle out of the deal. Here are key strategies for a home buyer haggler.
Do Your Research
Negotiating is more than playing hardball and throwing out numbers. You have to have the data to back up your claims. Research the home you are looking to buy. Find out what the previous selling price was for the home. How much it has appreciated in value since it was purchased. Get the facts on neighborhood home prices and find out those comparisons. Remember that you have to document this information and have with you because all too often numbers can get jumbled during the negotiation process.
Ask Questions
Make sure to write down a list of questions you need answered before viewing the home. For instance how old are appliances, heating and cooling equipment, state of the roof, septic systems, etc. Then during your preview of the home ask on the spot questions about any damage you see, deterioration, or any wear and tare that could be an issue. It is good to raise these questions because it gives you a better idea of what the home may need in the future. Stay skeptical on the down points without being overly negative. Concerned should be your persona.
Be Brave
Animals can smell fear, and a sellers agent is a blood hound. Don’t be fooled by their gentility or kindness
, their loyalty lies with their seller. While they are obligated legally and ethically, to give their seller every offer they are presented with, they may try to convince you it will not work. This is why it is good to have an insider on your side. Find an unassociated buyers agent to help with the negotiation process.
Tags: haggel, haggling, negotiations, new home buying tips
At some point in life we have all been counterproductive to our own success. Some people only learn their lessons the hard way, through trial and error, marred with the battle scars of experience. For many home buyers this process can cost you thousands of dollars and jeopardize the financial success of buying a new home.
No, the home buying game hasn’t changed, but the players 
are getting smarter. With so many resources at their fingertips, home buyers are replacing monotonous leg work with quick and effective solutions.
Prioritize: Make a list of all the things you are looking to find in your new home. Organize this list based on the ammenities you can not live without and which are negotiable. Remember that if the home you are looking at does not meet all the requirements you have listed, if the price is below budget there is always the option of upgrading the home based on your own specific taste.
Pre-Approval Loans: Knowing your price range before all else will help ensure that your search not only dictates what amenities you want to obtain, but it also reflects what you can actually afford. Reality is key in Real Estate.
Mailing List: Why go through the routine of searching through newspaper ads when looking for your new home when you can get a listing of homes in the area you want sent directly to your email. A rapid request form requires basic information about the home you are looking for and then sends you listings of the homes available, in the area specified, with the amenities the buyer desires.
Tags: buying a house, home buying, new home, real estate
A persons home is their sanctuary. A refuge from meetings, deadlines and the every day suppressors that the outside world compiles upon us all. In this dwelling there are many personal effects that adorn the floors and walls to tell a persons story, who they are, what type of life they lead. If our homes can say so much about what we have been doing, could they also be a clue to weight gain?
Scientific studies often showcase their hypothesis by testing on animals and then progressing to humans. Without running the risk of PETA crashing this blog, it could be understood that an animal given improper living conditions that are conducive to sedentary living will undoubtedly gain weight and be less healthy due to inactivity. I the same regards, people can fall into a stagnant lifestyle that perpetuates weight gain. So in fact, your house can make you fat. The real question is how do you combat the negatives your home may be presenting you with?
First step is understanding the barriers or challenges your home may be presenting in the way of physical activities and then resolve a solution that can help rectify the aforementioned obstacles. Here are 8 ways your house can make you fat, and what you can do about it.
1. Entry: For many new home buyers, the luxury of parking the car in the garage and entering your home free of natures wrath is a sought after luxury. Considering, though, that most garage lead straight into the home, and usually through the kitchen, it can be a moot point for increasing a waist line. Even if you need to keep your car securely parked, consider using another entrance to your home besides the kitchen. Having the option to start grazing after a long day of work can be a common trap for many people.
2. Size: Size can be a help or a hindrance. If your home is too small you don’t have the room to incorporate exercises within your home or store athletic equipment. If your home is too large you may too occupied keeping it clean to keep in shape. make sure your home is the right size for you and your lifestyle. A size that doesn’t require putting all your belongings in storage or require full time upkeep is the most desirable balance.
3. Location: Another key factor in your environment is where you are positioned relative to work, shopping, fitness facilities, etc. If you live in an area close to parks and recreational facilities you are more inclined to use these facilities. If you have to drive everywhere because there is nothing remotely close enough to walk or bike to, then it becomes more likely that you wont.
