Mortgages

How to Avoid Home Foreclosure

Foreclosure is a potentially devastating problem that faces homeowners. When a homeowner is not able to pay the mortgage loan, the bank will reclaim the mortgage property. This is the beginning of a foreclosure proceeding. Foreclosure can occur suddenly. If the financial situation of the homeowner changes, he could be facing the real danger of losing his property.

Before foreclosure happens, it is important that the homeowner takes steps to avoid this problem. Here are some steps to prevent this from occurring:

1. Get a fixed interest rate.

A variable interest rate on your mortgage is highly unstable. If changes in the economy occur, the rates could shoot up in an instant especially during economic recession. When this occurs, the monthly payments that the homeowner has to pay will rise drastically to the extent that the he could no longer afford it.

To avert this potential disaster, it is a good idea to get a fixed rate on the mortgage loan. A fixed rate will remain the same even if market situation changes. This means you know exactly how much monthly premium you need to pay each and every month. And, you need not worry about fluctuations in the economy because your interest rates on loans will be unchanged.

2. Dialogue with lender.

If you lose your job and you think you cannot make monthly payments anymore, it is good to arrange a dialogue with the lender or bank before the problem becomes full-blown. Talk to the creditor about your financial situation. And give him a satisfactory and valid reason explaining why you cannot pay monthly premiums. The lender might take into consideration your reason and give you a grace period, enough time for you to secure the money for payment.

3. Debt forgiveness.

This is one option that a debtor may resort to if he has a very considerate lender. A lender might waive your missed payments once he hears your reason. This is called debt forgiveness which seldom happens but it is a possible solution. However, you must agree to pay the monthly premium after the missed payments are waived.

4. Loan repayment plan.

This is another option that a homeowner can request from a lender. In this plan, the payments that the homeowner missed will be divided into easy to pay monthly plan. This way, he can catch up with the monthly premium payments.

5. Loan modification.

This is another option available for homeowners to evade foreclosure. In this process, the homeowner will negotiate with the bank for lower interest rates or lower monthly premiums. This will make the payments more affordable for the homeowner who is in a temporary financial bind.

6. Short sale.

The house is sold before reaching the point of foreclosure. This way, the homeowner is able to pay the debt in full. Sometimes, the sale price of the home could be lower than the actual mortgage. It is good to discuss this with the bank. The bank might accept the amount and forgive the unpaid balance.

7. Foreclosure mediation.

An arbitrator acts as the mediator between the homeowner and the bank. The meeting between the debtor and lender will focus on the reduction of principal or interest or issuing deed-in-lieu of foreclosure.

How to Add Value to Your Home

Home improvements are always regarded as the ideal investment to make in a home. They work to greatly add value to your home price. The apparent belief is that home improvements not only make the house more of a pleasurable living experience to endure but they also increase the value of your property.

add value to your house

This is a fair definition of what home improvement should achieve but a lot of the home improvement carried out doesn’t actually get to reach these and other less obvious but just as important goals of home improvement.

So here are some basic characteristics of what would make for good home improvement efforts:

a) They should improve the overall value of the property, in particular regard to two potential audiences: banks and property buyers.

b) They should make the house more practical in terms of being used as a living space. Open space improvements, for example, help reduce on walls which take up space and make navigation cumbersome, even in large houses.

c) They should have an overall impact on reduction of the cost of utilities. Home improvement projects that improve water use, drainage systems, save on electricity bills by improving access to natural light or by providing efficient lighting systems as well as improving central heating systems certainly fall into this category. If by home improvement you are adding a paint type, for example, that enhances lighting in your house, even at that level, you are on the right track.

d) Home improvements that improve the safety of the property are certainly vital as well. These include improving heat and electrical insulation, fire systems as well as general security systems like alarms. If you install nets in areas with houses that can be accessed by insects or storm windows for bad weather-prone areas, you are getting value for your home improvement investment.

e) Home improvement is also probably best done by a professional. It is all very well to try and do things around the house once in a while but installing new garage doors or re-tiling the kitchen really should not be done by you. The less than professional work actually shows, even to an untrained eye.

f) Convenience also really helps home improvement worthwhile. If you upgrade some of the bedrooms, particularly the master bedroom an en-suite bedroom, the value for the property is bumped up considerably due to the added convenience.

Of course you may have some improvements that do not fall directly into this category, that though they may be pleasing to the eye or your own personal tastes, really do nothing for you intrinsically, or for the property in terms of adding value. These include things like interior decor and swimming pools. You may add them of course, but only as a bonus.

In the long run, it helps to get all the other aspects out of the way first.

Cover Your Future With Home Insurance

There are a lot of homeowners out there thinking about getting a good home insurance. Well, you can stop thinking and act promptly to get your home insured against all those bad things that can happen to it. A home is one of the most treasured things of one’s life. Insurance protects it from nightmares coming true and cover the expenses of repairs. You can never tell what is going to happen next. A storm or some short circuit fire can destroy your precious home or damage it so badly that it is not possible to live in without repairs. Anyone who has done some recently would know how costly it is to repair. The carpet washing costs you fifty dollars! Think about restoring it in case something happens. With an insurance, you don’t have to worry about the expenses. Instead, the insurance company takes care of it all.

If you have decided to go for the insurance, you must also decide on a company or a plan to go for. Here it becomes a bit tricky as there are several companies and multiple times that are the plans offered by them. We all know after recession hit, people are having difficulties affording everything that used to be easy to afford. If you think insurance premiums are too much for you, then think again. The reason behind all these insurance companies staying in the company means they all have clients. That also means that with some luck and effort, you can find the suitable one for you. Choose carefully from the plans as they cover different areas that you may or may not want. Try to look for the areas you want covered most for a premium that you can easily afford and continue. Then go for the plan and you’ll be secure from a lot of potential expenses.

My First Home Loan

Being a first time home buyer is the greatest feeling in the world for everyone. There are two types of home loans, there is a first mortgage loan it can be 15 to 30 years. The second mortgage which is a home equity. First mortgage homes have a lower rate than the second mortgage. The best loan is a fixed loan.

Buying your first home
Buying a house is one of the biggest financial decisions.

To get a home loan you will need to find a real estate agent. This is a ways process. You should get recommendation from someone that just bought a home. Once you have contacted the real estate agent you will then bring all your information to them. You will need to bring your proof of income. You will need documents like W-2 and all of your bills like credit cards and any monthly payments that you make. All of these items will compare your income to your debt ratio and it will give them a idea on what you will be able to afford.

You will need to get pre approve before you can make any steps forward. Once the information is submitted to the lender. The lender is the one that gives you the money and the permission to purchase the home. The information than goes into the underwriting. The underwriting is the loan commitment. This process can take up to a month, depending if all the information is provided. Once you have loan commitment than you are free and clear to actually purchase the home that you want. The funds are all there for you. Good faith estimate and any kind of disclosures like your closing cost. Lenders are require to make sure that they sign you all the document that are proof of the loan. They must perform high quality service.

There are so many programs to finances a home. If your credit is bad you will have to meet a credit score to get approve. Having bad credit and trying to buy a home, you can go to a credit repair company to fix up your past debts. It could be up to a 12 month process depending on how your history is. You are better off to clean your credit when trying to buy a home then to buy a home with bad credit. If you buy a home with a bad credit score you will have high interest rates for the next 30 years.