mortgage loans
A mortgage loan is a loan secured by real property through the use of a mortgage (a legal instrument). However, the word mortgage alone, in everyday usage, is most often used to mean mortgage loan .
A home buyer or builder can obtain financing (a loan) either to purchase or secure against the property from a financial institution, such as a bank, either directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably.
indigo433
asked:
"Who does the mortgage lender disburse the loan to. From my understanding, the lender direct deposits the loan into the buyers (borrowers) bank account. Then the buyer cuts the seller a check. Is this correct?I was not eligible to borrower any funds beyond the asking price. So my mortgage consultant advice me to work out a side deal with the seller. The seller is asking for 40,000. But the consultant said raise the price to 55,000 and let the seller refund the 15,000 to me. So that's what I did. We (meaning the seller and I) made the purchase agreement for 55,000 and made a side contract (notorized) stating the seller agrees to refund the 15,000 for repairs and rennovations. Even though I have this contract, I am a little skeptical if the seller will follow through without a hassle. Can I arrage it where the lender disburse the 40,000 to the seller and 15,000 to me. What will happen if the lender finds out about our side agreement? Do they really care?"
Question posted courtesy of:
Matt J replied:
"No, the after the loan closes the fund go the the title company and it splits up the money. The funds are directed by the HUD. Matt "
Amanda H replied:
"NOOOO. I wish, wouldnt it be nice?An escrow company handles EVERYTHING. They take the loan funds from the mortgage company, along with a down payment (if applicable) from you and you sign the deed to make teh house yours.The escrow company then pays off the original (seller's)_ mortgage, deducts the seller's costs, and cuts a check for the remaining amount to the seller."
becca9892003 replied:
"the reason you were told to make a "deal on the side"...is becasue it is not allowed by the lender to have more the 3%-6% seller contributions on a mortgage loan......the HUD can only show the disbursement of funds that are allowed by law.....and your right even though you may have a side contract what you did is risky and if they fail to pay you ....it is you alone who will have to try to get that money back..the realtor and the bank will not help you at all...theres a reason they dont allow these things during the transaction.....good luck..."
larry r replied:
"These are the kind of deals that give the mortgage and real estate industry a bad name. There's always someone out there willing to break the rules and the result is more regulation and paperwork for the rest of us. People complain about how much paperwork there is for a mortgage. If anyone took the time to read the documents, it would be obvious that what you are doing is not allowable. The loan officer is basically advising you to commit fraud. What I don't understand is why any loan officer or real estate agent is thinking when they jeopardize their career over a $40,000 deal. There are honest ways to solve this problem without getting anyone in trouble. If the property really appraised for $55,000, (and the appraiser wasn't in on this scam) you and the seller can agree on a higher selling price to include some seller concessions. The seller can legally pay up to 6% of the sales price (on some loans) in concessions including buyer's closing costs, repairs to the house, etc. For most conventional loans, the maximum seller contribution is 3% of the sales price. You could get a first mortgage for the $40,000 and have the seller carry back a second mortgage for the balance. The terms of the second can stipulate a discount under certain conditions. What I'm saying is, you can be creative without being illegal."
Justin replied:
"That is incorrect. The lender disburses their check to the title company. The title company then disburses monies owed to all parties involved, the seller get's his check minus his costs.If the underwriter finds out about your "little side bet" you will get denied before you can blink. The scenario you mention above is a violation of Real Estate Settlement and Procedures Act and is therefore illegal."
J O replied:
"What you did is totally against the law. Who was your mortgage guy? Chop shops like this are horrible for our industry and consumers at long. He should have his license revoked for approving that loan, and if he encouraged it then he should be fined and placed in prison. Your deal artificially raised prices for all of your neighbors and put your lenders bank at risk. On that deal your lender would be lucky to make 2 grand. I hope it was worth it to him."
bianca replied:
"what you did is illegal, but many people doing this anyway.after the closing the money (whatever the seller will make after selling this property to you)will go to the title company account and they will give check to the seller. the seller then, will give you their check with $15000 . technically you are in the mercy of the seller, because you agree to purchase this property for $55000 so they don't have to give you back any money, but good thing is you have agreement with them and i don't know how this work in your state, but this is the deal we call "under table transaction" without lender any knowledge and you can't do nothing about directing them how to disperse the money. they will not allowed.never hear horror stories, that seller will not give money to the buyer."
xugu replied:
"Lenders wire the funds to the escrow account. The escrow/title company handles the disbursement, so you'll be receiving a check from them,"
ronidl76
asked:
"I know APR loans are a bad idea, but how would an interest-only loan work? Would it still be a 30 year note, or do they extend the loan? Would I be able to get a fixed rate with an interest-only mortgage loan?"
Question posted courtesy of:
Miss Emily replied:
"Every loan has an APR, what people refer to as "bad" is an ARM (adjustable rate mortgage).An interest only loan is usually amoritized over 30yrs. But yes, you are just paying interest only & NOT paying anything towards your principal. If after 30yrs. of paying Just the interest on say a $100K loan,,,, after 30yrs. you would still owe $100K, at which time you would sell the home or just refinance. Most people do not pay interest only on the same loan for 30yrs.If you have an interest only loan, it is because you couldn't afford to pay the principal as well when you first got the loan. You should contact the bank who holds your mortgage note & ask if you have a "pre-payment" penalty OR if it would be OK to make some payments towards your principal.If you're currently on an adjustable rate interest only loan, it would be better & safer to refinance to a fixed loan payment. Even if it is interest only, just make sure you ARE able to, if you want, to make extra payments towards principal."
Kim F replied:
"In an interest-only loan or mortgage the borrower only pays interest each month. This makes it cheaper than a conventional mortgage, in which part of each month's payment goes towards the principal and part goes towards interest. These loans have become popular because the monthly payments are lower, allowing borrowers to afford a larger home. However, these loans can be dangerous, especially in a down housing market. The interest rates are generally fixed for the first 1, 3 or 5 years. After that, they convert to a conventional loan, with a higher monthly payment. Most borrowers take on these loans because they assume they will sell the home before the interest rate increases. In a down market, they may not be able to sell. If they cannot afford the increased payment, they may have to default on the loan, and foreclose on the home. So, when the rate starts to adjust, you would need to refinance again. And, either get a fixed or another interest only adjustable. And, yes, I do believe you mean ARM. Although, if you have extra money every so often, you can pay down the principal in extra payments."
nashdude replied:
"In an 'interest only' loan you never pay principal down at all, just pay interest only. when the loan term is over, you still owe the principal in full. These work best when you're taking out a short term loan to, say, rehab a house that you intend to sell for more than you bought it for, so that you can reap the profit. These loans aren't for the average person. These loans are for various terms, but usually short term (1-6 months, 1 year, etc) and are almost always fixed rate."
p k replied:
"you can get a fixed rate of 1-30 years at interest only payments. the loan term remains at 30 years. so you can get a 5 year interest only loan based on 30 year pay back term. what this means is that the first five years you are required to make only interest payments. any amount more than that paid will get applied to principle. after the 5 year term comes up, the loan is still open but now your payments either adjust to the market at the time and/or your payments become principle and interest. Interest only loans are good if you get them fixed for 5 years or more. it helps make payments more affordable, but you never pay down your balance. if you ever plan on moving within 10 years, dont get a loan that requires principle and interest. if you know you will never move again, then go for a principle and interest payment as long as you can afford it."
flamingojohn replied:
"The other answers are mostly correct, however no interest only loan product allows for interest only payments throughout the term of the loan. They are all limited to a pre set interest only period with 15 years being the longest period I am aware of. These loans can be fixed rates as well. The best one I know of is a 40 year loan term with the first 10 years being interest only. This basically allows you to make smaller payments for the first 10 years, then having a traditional 30 year fixed rate over the remaining 30 years. There are also no rules that do not allow you to pay towards the principal during your interest only period. Many people will take an interest only loan for the security of having a smaller payment when they need it, but paying extra to principle when their budget allows. Anything you pay extra applies directly to your principal balance which will ultimately reduce your payment once the interest only period is expired."
Ana C
asked:
"Am applying for a mortgage loan and have two school loans already on my credit report but specify one is not in repayment and second is deferred. However, the loan application is requesting all expenses listed on my credit report. Are these loans not in repayment included in my expense ratio?"
Question posted courtesy of:
Flower Girl replied:
"Yes, because it is a bill that is owed, even if you are not currently paying it."
Prncess of 2631 replied:
"I bought a house a few years ago and was still in school. They took an estimate of when I would start having to repay the loans, at the time it was about 2 years from the start of the mortgage. So, no they did not add it in to my current expense ration. I would say if the loans will be due in the current future, less than a year, then they would."
Carolinahomerates.com replied:
"Student loans that are deferred...need to be deferred for 3yrs in order to take it out of the expense ratio.If not, I WOULD HIGHLY recommend that you find the original contract of the student loan. OTHERWISE, the underwriter will use his own calculations of what you will pay...which is USUALLY higher than you will normally pay."
Landlord replied:
"I am not sure why you are not repaying it, but it is still due before your mortgage will be, which is usually in 30 years."
alterfemego replied:
"Ana they are included in your overall financial picture and debt ratio's."
Boat Junkie
asked:
"I have been reading lots about the housing crisis and have learned that the loans for new mortgage loans for people with low scores it getting harder to aquire. What constitutes a low score? 600? 590? 650? 625? I am now ready to buy my first house and am finding out that my scores may prevent me from getting a loan."
Question posted courtesy of:
acermill replied:
"In the current market roughly 625 is about as low as you can go without getting a usurious interest rate. A few years ago, it was different, but lenders have tightened up considerably on minimum credit scores."
ruscito_mom replied:
"You can have any credit score and get a loan thru FHA. Credit score will not matter. Low score is below 620. I have gotten people loans in the 400's. Rates as low as 7%"
Flyby replied:
"Lenders typically prefer a credit score of 650 or higher. There are probably still those who will make a loan with a lesser score, but rates will be higher and other terms may not be as favorable. I suggest getting a copy of your credit report and score and find a mortgage broker in your area. They can usually direct you to those who are most likely to make a loan to you with your scores. They will also help package the loan and shop it for you."
Gregorio replied:
"You would have to clarify that more. Your options start to seriously change at 680 generally for "A" paper lenders and around 620 for others. That does not mean you cannot get a good rate with a score below that, it just means your options change. You may need more down payment, or more documentation or more money in reserves. Many factors go into a mortgage rate so it's hard to just answer based on rate. As for the person that said they got someone a loan at 7% with a 400 FICO, well, that;s just an outright fabrication. I'm sure they will argue that it;s true but I assure you it is not. No way no how! And yes I know FHA is not FICO driven, but I still say "horsepuckey"!"
diesel6999999 replied:
"Dear Boat, It would serve you better to find out why your score is low! There are numerous ways to improve your score, but first review it and check the info that's being reported, if incorrect go on line to that agency and fill out an OPT-OUT form to challenge the mis-information. Pay any collection you DO owe, (get proof of pmt.). It is true that F.H.A., V.A. and U.S.D.A. do not use fico score, but they review c/r and derogatory credit is a reason for denial! Good Luck!"
oteb p replied:
"Currently 620 and above can get you a good rate especially if you fall under one of the many affordable housing programs out there. under 620 and down to 500 be ready to have at least 15 -20 percent down and the rate will be in the 9's or higher just the current nature of the beast."
Landlord replied:
"It is funny how many opinions there are. I think anything under 680 is low, and you should not get a loan at all, that low obviously can not cope with making payments of any kind. I would never allow mine to drop below 770 because I hate paying interest. 625 is ridiculously low."
El Diablo in Mexifornia replied:
"In California, if you're under 700. Forget it."
Carolinahomerates.com replied:
"620 and below is considered subprime.FHA has a no score requirement so you can have a 400 and still get a mortgage. You only need 2.25% for a downpayment but you cant have any credit lates in the last 12months!"
Julio
asked:
"I was looking up my credit report online and for the questions to make sure I was me I was asked about mortgage loans in two different years that I know nothing about. I'm renting a apartment and haven't took out any loans that I can think about"
Question posted courtesy of:
hot chick replied:
"not sure though"
pay replied:
"get your credit report from equifax and if you find anything that you don remember apliying for that should be a red flag."
Glenny replied:
"Were you using a trusty credit report company? If you weren't, THEY may be wanting to find out more info about you. Call your credit card company, or bank card, and ask them who you can call, or where you can go for a trusty, safe credit check."
pizzagirl replied:
"Go in person to a bank. They can help you look up your credit report. It will cost you a little more to do this but it's worth it. I have some weird crap on mine that I am still fighting. But, at least I know about it to fight it!!! By the way, my name is Crystal and Kris, Jr. is giving me a bad credit rating. My fight has allowed me to rectify myself and buy a second house. Don't stop fighting for your good name!!!"
HgO replied:
"Check your credit reports from 3 bureaus: Equifax, Transunion, Experian.If there are discrepancy with real history the bureaus should be able to give you the details. Then get in touch with the banks that gave out mortgage to "you" . This is a federal crime and banks have Fraud departments that will work with you.Good Luck!"
Joselito Tito M. Fraginal replied:
"It is usurpation of your person. Thus, file a case against the person using your name."
accountant replied:
"www.mycreditkeeper.com will allow you to view all 3 reporting agencies at once. I have also looked up my reports online and had them ask bogus questions When I looked at the report, nothing showed that had the info from the bogus questions. I think they just throw those in there for the match up process. I would check your report at the site I listed and if nothing shows, I wouldn't worry about it."
If you love to sell, this may be the field for you. But jobs -- and incomes -- rise and fall on interest rates.
Fraudsters as Economic Terrorists: Panderers with Unclean Hands. Cheat is to defraud, swindle, practice deceit, or violate rules or agreements. According to the Washoe County, NV public records, on November 23, 2004, Richard W. & Tracy D. Homier of 4809 Grandview Dr., Albany, GA 31721, signed a CTX Mortgage Second Home Rider for a home loan on
In January 2007, as years of loose mortgage lending were about to send the nation's housing market into devastating decline, Fannie Mae chief executive Daniel H. Mudd wrote a confidential memo to his board.
In August 2007, as financial markets began to crumble under the weight of bad mortgage loans, Chairman Ben Bernanke told the Federal Reserve's annual gathering at Jackson Hole, Wyo., that it wasn't the central bank's responsibility — "nor would it be appropriate" — to protect lenders and investors from poor decisions.
When foreclosing banks try to sue, if challenged, they may be unable to show they have the note. Without proving to the courts that they have the note, it is simply impossible for them to sue for foreclosure of a mortgage they have no ownership interest in.
