Wednesday, April 13, 2011
Tuesday, April 12, 2011
What Happens To My Mortgage When I Sell My Home?
If you own a home, you undoubtedly are carrying a mortgage on it. A mortgage is simply a loan from a bank or financial institution for percentage of the value of the home, which you pay to the person you purchased the home from when you bought it. Depend on the type of mortgage you have, the amount due on the loan should have decreased during the time you lived in the home and made monthly payments.
When you go to sell your home, the simple question is what happens to the then due balance on the mortgage? The simple answer is the financial institution is going to be paid out of the proceeds of the sale before you see anything. As a result, it is critical that you calculate in the loan repayment amount when determining if it makes sense to sell a home. If you have a home worth $300,000 and owe $280,000 on the mortgage, you are going to realize little or no profit after the costs associated with the sale and probably shouldn't sell it.
If you have plenty of equity built up in the home, your mortgage can still end up costing you more than you originally expected. Many modern mortgages have restrictive penalties built into them. These penalties are designed to encourage you to hold onto the home for a set period of time, usually a couple of years, so the bank can recover a certain amount of interest up front. Put another way, the bank is trying to lock in a certain amount of profit on the loan.
When it comes to these restrictive penalties, lending institutions get pretty creative. Many will include a penalty if you sell or refinance the property within the first two years of the loan period. The penalties can be anything from the equivalent of three months of payments to a preset amount or even a percentage of the loan. State law often influences these issues, so you need to read your mortgage loan documents closely.
Regardless, you mortgage is going to be paid off as part of the sales process. The exact amount will depend upon the nature of your loan.
Raynor James is with the FSBO site - FSBOAmerica.org - homes for sale by owner. Visit our "Sell My Home" page to sell your house or our home buying page to view and buy homes, houses, condos, land and real estate.
Article Source: http://www.articlealley.com/article_19865_33.html
Author: Raynor James
About the Author: http://www.fsboamerica.org
Sunday, April 10, 2011
FHA Home Loans: What You Need To Know About It
There are several types of loans available to homebuyers. However, mortgage loans are not always affordable and those who are not earning enough to make the down payment or monthly mortgage dues will not be able to buy a home for their own. Thankfully, there is the FHA home loan. But what is FHA home loan and how is it different from other forms of loans?
FHA home loans:
This is a type of loan issued by a federal authorized lender and it is guaranteed by the Federal Housing Administration. This is specifically for borrowers who have low to moderate income. This is extremely helpful for these homebuyers because they would not be able to make the expensive down payment. This is its primary purpose, to make home ownership affordable for everyone. This can be a fixed or adjustable rate mortgage.
How to qualify?
Just like most of the mortgage types, FHA loan is not for everyone. There are certain guidelines and requirements you need to follow. However, you will be pleased to note that this is among the easiest kind of mortgage loan to qualify for. How so? Well, it is because it is flexible and affordable, considering that it will only require you to make a 3% down payment.
There are a few requirements you have to satisfy though. One is that you need to have a stable or an increasing source of income for at least two years. It is preferable that your employer is the same throughout this period. One has to satisfy certain credit requirements. If you have filed for bankruptcy, it should be at least 2 years old. If you have undergone foreclosure, it should at least be three years old. And to make sure that you can pay off your mortgage, its payment should be about 30% of your gross income.
How to apply for FHA loan?
Before applying for an FHA loan, see to it that you have all the essential documents. Among the documents you need to present are your bank statements. See to it that they are the most recent. You should also prepare copies of proof of assets. This could be a policy for your life insurance and pension plans. You will also ‘need to present your driver’s license and social security number.
You should also prepare your income tax returns. You can ask the IRS if you do not have a copy. Your lender will also need to determine your debt-to-income ratio, which is why you have to prepare documents that will be needed in the computation. This may include divorce paper and the like. Once you have prepared all the essential documents, submit your FHA loan application
FHA loans made it possible to low to moderate-income earners to purchase a house. If you want to own a home and you feel that you cannot afford one, check if you qualify for this. There are a few requirements you have to present to qualify. However, everything is easier compared to other types of loans.
Article Source: http://www.articlealley.com/article_2177205_33.html
Author: Roby Smith
FHA home loans:
This is a type of loan issued by a federal authorized lender and it is guaranteed by the Federal Housing Administration. This is specifically for borrowers who have low to moderate income. This is extremely helpful for these homebuyers because they would not be able to make the expensive down payment. This is its primary purpose, to make home ownership affordable for everyone. This can be a fixed or adjustable rate mortgage.
How to qualify?
Just like most of the mortgage types, FHA loan is not for everyone. There are certain guidelines and requirements you need to follow. However, you will be pleased to note that this is among the easiest kind of mortgage loan to qualify for. How so? Well, it is because it is flexible and affordable, considering that it will only require you to make a 3% down payment.
There are a few requirements you have to satisfy though. One is that you need to have a stable or an increasing source of income for at least two years. It is preferable that your employer is the same throughout this period. One has to satisfy certain credit requirements. If you have filed for bankruptcy, it should be at least 2 years old. If you have undergone foreclosure, it should at least be three years old. And to make sure that you can pay off your mortgage, its payment should be about 30% of your gross income.
How to apply for FHA loan?
Before applying for an FHA loan, see to it that you have all the essential documents. Among the documents you need to present are your bank statements. See to it that they are the most recent. You should also prepare copies of proof of assets. This could be a policy for your life insurance and pension plans. You will also ‘need to present your driver’s license and social security number.
You should also prepare your income tax returns. You can ask the IRS if you do not have a copy. Your lender will also need to determine your debt-to-income ratio, which is why you have to prepare documents that will be needed in the computation. This may include divorce paper and the like. Once you have prepared all the essential documents, submit your FHA loan application
FHA loans made it possible to low to moderate-income earners to purchase a house. If you want to own a home and you feel that you cannot afford one, check if you qualify for this. There are a few requirements you have to present to qualify. However, everything is easier compared to other types of loans.
Article Source: http://www.articlealley.com/article_2177205_33.html
Author: Roby Smith
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