Bankruptcy - a means to avoid foreclosure.

Bankruptcy is the last option to choose to avoid foreclosure. If no other options help you to avoid foreclosure, then you can opt for bankruptcy. But you cannot just file bankruptcy on your own. You can file bankruptcy only if you pass the eligibility criteria. You can take help of an attorney to file the bankruptcy. There are two different kinds of bankruptcy - Chapter-7 and chapter-13. So the attorney can also help you to choose which chapter is appropriate for you to file.

Bankruptcy chapter7

If you file Bankruptcy chapter7 then all your non-exempt properties will be sold to pay your creditors. Chapter7 hurts your credit report heavily but the lenders cannot come after you for the deficiency judgment. If you file chapter7 then your credit score will be doped by 250 to 300 points. Also you may not get approved for mortgage for 5 to 7 years after filing bankruptcy chapter7.

Bankruptcy chapter13

If you can file bankruptcy chapter13 then the lenders cannot foreclose or harass you. You can be able to pay your lender with an easy repayment plan with an affordable rates and terms. It does not affect your credit as much as the bankruptcy Chapter7. It will drop your credit score by 100 to 150 points and you may be able to get approved for a new mortgage within one year after you file bankruptcy chapter13. But the best thing is that you can keep your dream home as your are filing chapter13.

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How can you avoid foreclosure?

Foreclosure has become a daily phenomenon in our life. Actually foreclosure is considered even worst then Bankruptcy. The lender can sell your house to get his money back. It will also affect your credit report and cause to drop your credit score by 250 to 300 points. So we should have a clear idea about how can you avoid foreclosure if the worst happens. So I have tried to point out some useful ways through which you can avoid foreclosure.

1. Whenever it seems that you can’t afford the mortgage, first of all contact the lender and check out what are the options that are available for you.

2. You can also request the lender for forbearance that is a formal agreement between the lender and the borrower for delaying the payment.

3. You can even request for a repayment plan and to change the terms and condition so that you can catch up the missed payments.

4. If you want, you can sell the property and pay off the lender to avoid foreclosure.

5. Now if the property value is lower than what you owe to the lender, then you will have to take permission before selling the property. This is called short sale. This is another way to avoid foreclosure. But here the lender can ask you for the deficiency judgment.

6. If you cannot even sell the property then you can request the lender for Deed in lieu of foreclosure. But in this case the lender cannot come after you for the deficiency judgment.

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How to Improve Your Credit Score

how to improve your credit score?

Your credit score is one of the most impotent things to determine whether you are eligible or not to get a loan or buy a property or car. Even the rates and terms of the loan will depend upon your credit score and your credit history. If you have lower score then the interested rate of the loan will be higher and if you have higher credit score then the rate of interest rate of your loan will be comparatively lower. Above 680 credit score is considered as good credit score. From 620 to 680 is considered as average credit score. But if you have a credit score lower than 620 then it will be considered as poor credit score and it will be tough for you get approve for a loan. So you should always try to maintain a good credit score.



If you have a poor credit score there are different ways to improve your credit.

1. First and foremost pay all your bills on time and keep a record of it.

2. Don't go for huge amount of debt that you can't control or pay back on time.

3. Don't close your old credit cards and don't always go for news cards. If you change your credit cards frequently then it will have a negative affect on your credit score. So keep your old account open.

4. If you have any wrong information on your credit score then try to dispute it ASAP as the wrong information will ultimately droop your credit score.

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Warranty Deed

Warranty Deed is another type of deed that is used to transfer the property to one person to another. But here the Grantor or the seller assures that he/she holds the title clear and free and has the absolute right to sell the property. The Seller even grantees that if buyer finds any debts attached to the title in the future then the seller will be liable to pay the debt. So it is always better to use a Warranty deed instead of Quitclaim deed when you are buying or selling a property. You can even hire someone for title search before purchasing the property so that you can find out whether there is any problem with the title of the property.



There is another kind of Warranty deed which is called Special warranty deed but this Special Warranty deed doesn’t assure as much protection as a General Warranty deed. In a Special Warranty deed, the grantor or the seller warrants that they have the ownership of the title and the title of the property has not been transferred to anyone else during their ownership of the property. The grantor or the seller warrants nothing prior to their getting the ownership. This type of Warranty deeds are mostly used by the trustees.

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Refinance

If you pay off your present loan with another loan with different terms and condition, this is called Refinance. This is mainly done to reduce the interest rates or cost of the loan. Sometimes it is also done to pull out the home-equity so that it can be used to pay off some high interest rate credit card debts. It can also be done to increase or decrease the time period of the loan. You can also turn the mortgage from ARM to FRM by refinancing. Even you can opt for refinancing to lower the monthly mortgage payments by increasing the total duration of the loan period. And if you want to pay off the loan early as you are getting a lower interest rate, you can opt out this option of refinancing.



By the way, sometimes your lenders can claim prepayment penalty if you are going for refinancing before a certain period of time. So you have to calculate whether you are actually getting any benefits after refinancing as you will also have to pay the prepayment penalty. Last but not the least, if you want to refinance then first go to your lender and check out whether he can offer you what rates and terms you want. If he or she can’t offer you what you want then you can shop for the lenders and check out who can offer you the best rates and terms. There is another kind of refinance which is called Cash-out refinance. This type of refinance is mainly used for home improvement or paying off any credit card debts or student loan.

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Housing Bubble

The owes of mortgage market continues still now and the country's economic condition is bad too. Even the number of unemployment has increased sharply and we are not sure whether this condition is going to be recovered in near future or not. But we can't even think that property prices are so low and it can't be lower. In future the condition may be worse. I think in this Christmas the mortgage rates are going be increased further. Hope in this housing bubble and economic rescission, our new government will be a bit more proactive, so that we can overcome this situation.

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Quit Claim Deed

A Quit claim deed is mainly used to transfer the real estate property among family members or friends. The quitclaim deed doesn't assure that the title free from any kind of liens. By the way, the quit claim deed needs to be notarized and recorded in the county recorder's office to make the deed valid. If you are buying or selling a property, then it is better to avoid the quit claim deed and use a Warranty deed as a Warranty deed assures that the title is clear from the liens and thus you can avoid future confusions.

A quitclaim deed does not release the grantor from the mortgage obligations unless or until the grantee takes the mortgage on his or her name. By the way if the property is in mortgage then it is better to take confirmation from the lender before signing the quitclaim deed.

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Debt to Income Ratio:

Debt to income ratio is also called DTI. Debt to Income Ratio means the percentage of gross income of the consumer that he uses to pay his debts. This is one of the most important factors that a lender or a lending institute checks before approving a loan or mortgage. If your debt to income ratio is less then 36 percent then you have a very good chance to get approve for a loan program with affordable rates and terms.

There are other factors also which a lender checks before approving the loan but it certainly help if you have a lower debt to income ratio. Like, for FHA loan, your DTI ratio should be between 28 to 36 percent.

How to Calculate Debt to Income Ratio:

Calculating a Debt to income ratio is not time consuming or difficult task. Just calculate all your monthly debts, mortgage expenses, home insurance and divide it with your gross monthly income. But don’t count your expenses towards utilities food, entertainment.

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Mobile home loans...Solution for your dream home:

Are you renting for a long time and thinking that you can't afford a home loan? When you are renting, your are just spending the money and giving it away to the landlord. But if you are buying a home then you are actually investing the money and can use it when it is needed the most. So I think an affordable mobile home loan is the solution for you.

You can get a mobile home loan as a personal property loan. But there are some requirements to qualify for the mobile home loan, like your credit score should be above 680, your mobile home should have a permanent foundation, you should make at least 10 percent down payments etc. BTW the interest on mobile home loan is tax detectable. So you can get the tax benefits too. So what are you waiting for... if you are still renting a home, then simply go for a mobile home loan

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Deeds That Effect Us.

Whenever you want to transfer a property from one person to another then you need to use a deed to complete the transfer. A deed is generally a legal document that is used to transfer property. This contains the name of the Grantor (previous owner) and the grantee (new owner), the grantor's signature and it needs to be notarized and recorded in the County Recorder's office to make the deed valid.

There are different types of deeds like Quitclaim deed, Grant deed, Warranty deed etc etc. But Quitclaim deed is the most popular deeds among all the other deeds. It is mainly used to transfer property within the family members and friends. A quitclaim deed doesn't assures that the title is free any clear from all the liens against the property. So it is better to use a Warranty deed or at least a Grant deed when you are buying a property. A Grant deed assures you that the title belongs to the seller and he has the wrights to sell the property. But it is always better to use Warranty deed when you are buying a property as it promises that the grantor has the absolute ownership writes and title is free and clear from all the liens. If there is any lien attached to the property, the seller will have to compensate it to the buyer.

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how does a reverse mortgage work ?

how does a reverse mortgage work?

Reverse Mortgage is one of the popular ways to get out the home equity and use it in time of dire needs. This is very impotent to know how does a reverse mortgage work.Reverse mortgage provides a steady flow of tax-free income. By the way you can get the money on monthly basis or one time lump some amount. This is just the contrary of the tradition mortgage.

Interest rates of Reverse Mortgage:

Reverse mortgagee are mostly adjustable rate mortgage and the rate changes on monthly basis or quarterly basis. And the closing cost is also a bit higher than the traditional mortgages. Reverse Mortgage may also affect your eligibility for Medicaid benefits. But this is a non-recourse loan and this is tax free. So this is actually a helpful way to pay off a huge debt or someone's education fees.

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Fixed Rate Mortgage in Financial Crunch

Fixed Rate Mortgage in Financial Crunch



In this nationwide financial crunch, people rather like to opt for Fixed Rate Mortgage, than Adjustable Rate mortgage. Economists and Critics even blaming the predatory lending practice and the Adjustable Rate mortgage for this financial down fall. So the Government also coming forward to help the defaulted borrowers so that they can refinance and turn the Adjustable Rate mortgage into Fixed Rate Mortgage. The main features of Fixed Rate Mortgage are -

1. The loan term usually varies between 15 to 40 years.

2. The monthly payments and interest rates remain same throughout the loan period


There are different types of Fixed Rate Mortgages available like 40 year mortgage, 30 year mortgage, and 15 year mortgage. But it is not that you should always go for Fixed Rate Mortgages. If your situation demands Adjustable Rate Mortgage then go for it. Suppose that you are going to stay in that house for 2 or 3 years then it is better to opt for Adjustable Rate Mortgage than Fixed Rate Mortgage.

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