As with all matters with foreclosure, there is no assurance that you will be eligible for this plan or that your lender will be able to extend this as an selection in your unique situation. Before you get your hopes up that this might work for you and help with foreclosure in your situation, there are some things you should know.
A mortgage insurance premium will be payable at once. And each year after that you must pay one as well. There is a proviso for equity and appreciation sharing with the federal government. So basically, any equity that you get in your home will have to be shared with the government. So unless you desire to pay the government half of the equity that you make in your home when you sell it, this is not a effective long-term answer for you. There are also no other loans permitted on the property for the length of this loan unless that loan is being used purely for property maintenance. So no home equity loans to help you pay off any of your other bills.
The other area you must be mindful of if you desire to utilize this as a path to help with foreclosure is that there are some very tight necessaries for even making this kind of loan. The loan had tohave been started on or earlier than January 1, 2008.The mortgage payments that you make at this time has to be more than 31% of your gross monthly income. You must not have by choice not made your payments. And you cannot own any different homes or other sorts of residential holdings.
Does this not appear like a good option to help with foreclosure to you? It could not be depending on your situation. It does have good points. Being able to retain your home tops the list. Having payments that are easier for you to afford is also another good point. For those of you that have ARM loans, this is a means to get into a fixed rate loan. Another good feature of this plan is that you will right away have a 3.5 percent equity in your house. This may be a fantastic good point if at this time you owe more on your house than what it is valued at. If that is the situation for you, be conscious that your mortgage company could not even extend this as an choice. They hurt financially with that and most lenders are not fine with that and so will not extend this to you as an option.
Multifamily Lending and Apartment Lending, Good News
Apartment lending remains one of the bright spots within the commercial mortgage business and borrowers can still expect long term, fixed rate financing, high leverage loans and low rates.
For example, we are still seeing 30 to 35 year fixed rate financing, though 5 and 10 year fixed is more popular with borrowers. Amortization schedules remain at 30 to 35 years with some government backed programs. As far as leverage, borrower can still get 80% financing on purchases (85% on loan request over $3,000,000) and 75% on cash out refinances. Rates are strong as well with most in the 6% - 6.25% range(2/10/09) though for larger loans rates in the 5%’s are available.
Apartment Lending, Multifamily Lending
What the bad news? Conventional financing is limited and multifamily lending is getting more conservative from a global perspective. Historically multifamily underwriting has been focused almost exclusively on the subject property. Now, apartment lending is becoming more like typically commercial mortgages, where the entire borrowers financial situation is scrutinized.
Meaning the borrowers personal needs will be examined, other businesses will often be looked at, etc to make sure that the borrower cash flows overall. (Keep in mind though that some programs, where loan amounts are over $3,000,000 the borrower personally is still not looked at.) This global underwriting is often cumbersome for borrowers that are not use to it, but this is just the new reality and borrowers will have to be willing to “play ball” if they want to get their multifamily property financed.
All in all, despite the recent changes, apartment lending remains one of the most viable sectors of the business. Most importantly, the liquidity is still there with terms that still make sense for borrowers. Borrowers should be ready to provide more documentation than they are use to, but compared to other sectors where financing is all but gone, it looks really good.
For example, we are still seeing 30 to 35 year fixed rate financing, though 5 and 10 year fixed is more popular with borrowers. Amortization schedules remain at 30 to 35 years with some government backed programs. As far as leverage, borrower can still get 80% financing on purchases (85% on loan request over $3,000,000) and 75% on cash out refinances. Rates are strong as well with most in the 6% - 6.25% range(2/10/09) though for larger loans rates in the 5%’s are available.
Apartment Lending, Multifamily Lending
What the bad news? Conventional financing is limited and multifamily lending is getting more conservative from a global perspective. Historically multifamily underwriting has been focused almost exclusively on the subject property. Now, apartment lending is becoming more like typically commercial mortgages, where the entire borrowers financial situation is scrutinized.
Meaning the borrowers personal needs will be examined, other businesses will often be looked at, etc to make sure that the borrower cash flows overall. (Keep in mind though that some programs, where loan amounts are over $3,000,000 the borrower personally is still not looked at.) This global underwriting is often cumbersome for borrowers that are not use to it, but this is just the new reality and borrowers will have to be willing to “play ball” if they want to get their multifamily property financed.
All in all, despite the recent changes, apartment lending remains one of the most viable sectors of the business. Most importantly, the liquidity is still there with terms that still make sense for borrowers. Borrowers should be ready to provide more documentation than they are use to, but compared to other sectors where financing is all but gone, it looks really good.
6 Good Reasons for a Home Refinance
Saving money is the primary reason for a home refinance, and there are several ways to accomplish this. One or more of the following points may apply to your situation, which can add up to reducing your monthly expenses:
How much do rates need to drop before refinancing?
You may have heard about a rule of thumb but, there really is no specific number. Instead of looking at a rate, compare the savings between your existing monthly payment and the home refinance payment. Use only the principle and interest payments on a loan amount that includes the closing costs, but does not include taxes, insurance, or cash out. Then decide if the savings makes it worth your effort.
Can you save money by refinancing credit card debt?
Most credit cards charge high interest, which is compounded daily. If you are carrying a substantial balance on credit cards, you may have a good chance of saving money by refinancing your home. Consolidating high interest debts with a low rate mortgage could reduce your monthly payments, and convert the debt into a tax deductable, simple interest loan.
Do you need money to pay for personal expenses?
You may have medical expenses, a college bound teenager, or maybe your home is in need of a new roof, or perhaps you would like to take your family on vacation. Whatever the reason, a home refinance with cash out can provide money for personal expenses. As long as you have sufficient equity in your home, refinancing could be one of the cheapest ways to access funds at a low rate.
Should you refinance from an adjustable a fixed rate?
An adjustable mortgage can be fine while rates are low, but eventually mortgage rates go up, and your payments will increase accordingly. Adjustable loans have a purpose, which is usually for short-term savings. If you plan to keep your home for a long time, refinancing to a fixed rate can provide long-term savings. You may not see much change now, but you could save money down the road.
Can you save money by reducing the mortgage term?
Getting a shorter term on a home refinance can reduce the amount of interest you pay over the life of the loan. Your monthly payments will probably increase, but your overall savings can be huge. You will build equity in your home much sooner with a shorter term, and it makes sense if you plan on keeping your home for a long time. For example, refinancing from a 30 year term to a 15 year term could save more than $120,000 in mortgage interest on a $200,000 loan.
What about eliminating mortgage insurance?
Provided you have enough equity, refinancing can save money by eliminating unnecessary insurance. If you paid less than 20% for a down payment when you bought your home, then you are probably still paying mortgage insurance. The insurance is only for the benefit of the lender, and will be impounded in your monthly payment until you sell your home, or refinance at 80% loan to value, or less.
How much do rates need to drop before refinancing?
You may have heard about a rule of thumb but, there really is no specific number. Instead of looking at a rate, compare the savings between your existing monthly payment and the home refinance payment. Use only the principle and interest payments on a loan amount that includes the closing costs, but does not include taxes, insurance, or cash out. Then decide if the savings makes it worth your effort.
Can you save money by refinancing credit card debt?
Most credit cards charge high interest, which is compounded daily. If you are carrying a substantial balance on credit cards, you may have a good chance of saving money by refinancing your home. Consolidating high interest debts with a low rate mortgage could reduce your monthly payments, and convert the debt into a tax deductable, simple interest loan.
Do you need money to pay for personal expenses?
You may have medical expenses, a college bound teenager, or maybe your home is in need of a new roof, or perhaps you would like to take your family on vacation. Whatever the reason, a home refinance with cash out can provide money for personal expenses. As long as you have sufficient equity in your home, refinancing could be one of the cheapest ways to access funds at a low rate.
Should you refinance from an adjustable a fixed rate?
An adjustable mortgage can be fine while rates are low, but eventually mortgage rates go up, and your payments will increase accordingly. Adjustable loans have a purpose, which is usually for short-term savings. If you plan to keep your home for a long time, refinancing to a fixed rate can provide long-term savings. You may not see much change now, but you could save money down the road.
Can you save money by reducing the mortgage term?
Getting a shorter term on a home refinance can reduce the amount of interest you pay over the life of the loan. Your monthly payments will probably increase, but your overall savings can be huge. You will build equity in your home much sooner with a shorter term, and it makes sense if you plan on keeping your home for a long time. For example, refinancing from a 30 year term to a 15 year term could save more than $120,000 in mortgage interest on a $200,000 loan.
What about eliminating mortgage insurance?
Provided you have enough equity, refinancing can save money by eliminating unnecessary insurance. If you paid less than 20% for a down payment when you bought your home, then you are probably still paying mortgage insurance. The insurance is only for the benefit of the lender, and will be impounded in your monthly payment until you sell your home, or refinance at 80% loan to value, or less.
National Loan Auditors and the Foreclosure Prevention ActWith the possible introduction of
the Foreclosure Prevention Act, Judges will be given the authority to provide loan modifications as a remedy. The ramifications of this cannot be understated. In many courts this will mean that a Judge, a person who knows a lot about the law but very little about lending, will have the virtually unlimited power to modify loans. If the Foreclosure Prevention Act becomes a reality and Judges are put into the position of loan modifier, a procedure needs to be in place to give the Judges guidance on how and when a loan should be modified.
Granting a loan modification as a remedy will most likely be treated as an equitable remedy but the courts. This will give the Judges some guidance as to how and when modification should be granted. Equitable remedies address fairness in a situation and seek to make both parties equal in the eye of the court. While this has worked in the past for judges its application is fairly limited. In the specific case of loan modifications the guidelines set out by equitable remedies are woefully inadequate.
What really needs to be done, and what National Loan Auditors can provide is a complete forensic loan audit of each loan related to a case brought before any judge. The forensic loan audit will find any errors in the origination of the loan and their severity. This will give judges a blueprint for what went wrong in the loan process. In knowing what went wrong with a loan, it will be easy for a judge to determine how a loan needs to be modified in order to make the loan fair and in compliance with the standards or the lending industry.
National Loan Auditors will also provide a standardized forensic loan audit that judges will become familiar with over time. All audits are not equal and some audits are confusing and filled with fluff. Using one company and one audit will save the Judges time which helps the state save money. National Loan Auditors has all the components needed for the courts to assist them in integrating the Foreclosure Prevention Act; quality, National Loan Auditors is the industry leader for forensic loan audits, reliability, National Loan Auditors is an established company, and volume, National Loan Auditors has the capacity to handle the needs of the courts.
Granting a loan modification as a remedy will most likely be treated as an equitable remedy but the courts. This will give the Judges some guidance as to how and when modification should be granted. Equitable remedies address fairness in a situation and seek to make both parties equal in the eye of the court. While this has worked in the past for judges its application is fairly limited. In the specific case of loan modifications the guidelines set out by equitable remedies are woefully inadequate.
What really needs to be done, and what National Loan Auditors can provide is a complete forensic loan audit of each loan related to a case brought before any judge. The forensic loan audit will find any errors in the origination of the loan and their severity. This will give judges a blueprint for what went wrong in the loan process. In knowing what went wrong with a loan, it will be easy for a judge to determine how a loan needs to be modified in order to make the loan fair and in compliance with the standards or the lending industry.
National Loan Auditors will also provide a standardized forensic loan audit that judges will become familiar with over time. All audits are not equal and some audits are confusing and filled with fluff. Using one company and one audit will save the Judges time which helps the state save money. National Loan Auditors has all the components needed for the courts to assist them in integrating the Foreclosure Prevention Act; quality, National Loan Auditors is the industry leader for forensic loan audits, reliability, National Loan Auditors is an established company, and volume, National Loan Auditors has the capacity to handle the needs of the courts.
Bad Credit Mortgage for Future
Mortgages for bad credit are becoming harder and harder to find now a days as lenders and financial institutions become more and more weary of consumer who are struggling. Mortgages for bad credit
have been perfect mortgage products for the self employed and individual with not so great credit ratings. If you feel you require a mortgage for bad credit and would like a break down of mortgages for bad credit then a good financial adviser will be able to give you a complete break down of lenders who can give you a list of appropriate companies. The idea behind offering mortgages for bad credit has always been looking a each case on a case by case basis and underwriting based on a human point of view rather than just typing numbers into a computer. As the economy has slowed down over the recent 12 months these types of deals have started to become view and far between. Although saying this the economy will more than likely bottom out in July / August time this year (2009) and rates and products will start to become more readily available again moving into Christmas and the first quarter of 2010.
Mortgages for Bad credit have always been a good source of income for lenders as they, in the majority of cases, offer above average mortgage rates which mean they ultimately will be making more money back over the life of the mortgage. Although the current economic climate is proving hard for a lot of lenders, mortgages for bad credit will always be an option as long as there are consumers who are either self employed and who have very erratic incomesor consumers who have over committed themselves and need to remortgage for either debt consolidation or the need to reduce there monthly mortgage payment. Always remember that if you are looking for mortgages for bad credit and you have explored every other avenue ie approving your high street bank or current lender always get at least three different quotes for mortgages for bad credit and compare each option carefully.
have been perfect mortgage products for the self employed and individual with not so great credit ratings. If you feel you require a mortgage for bad credit and would like a break down of mortgages for bad credit then a good financial adviser will be able to give you a complete break down of lenders who can give you a list of appropriate companies. The idea behind offering mortgages for bad credit has always been looking a each case on a case by case basis and underwriting based on a human point of view rather than just typing numbers into a computer. As the economy has slowed down over the recent 12 months these types of deals have started to become view and far between. Although saying this the economy will more than likely bottom out in July / August time this year (2009) and rates and products will start to become more readily available again moving into Christmas and the first quarter of 2010.
Mortgages for Bad credit have always been a good source of income for lenders as they, in the majority of cases, offer above average mortgage rates which mean they ultimately will be making more money back over the life of the mortgage. Although the current economic climate is proving hard for a lot of lenders, mortgages for bad credit will always be an option as long as there are consumers who are either self employed and who have very erratic incomesor consumers who have over committed themselves and need to remortgage for either debt consolidation or the need to reduce there monthly mortgage payment. Always remember that if you are looking for mortgages for bad credit and you have explored every other avenue ie approving your high street bank or current lender always get at least three different quotes for mortgages for bad credit and compare each option carefully.
The True Market Behind the Brokers
Whilst the Bulgarian property market continues to prove largely resilient to the negative forces of the current economic downturn, the foreign banks
on its soils are not fairing so well. The rapid decline of available mortgage products is now clearly evident, for foreigner buyers who didn’t pay cash this will prove to be the greatest catalyst for foreign owned repossessions in Bulgaria in 2009.
The offering of Bulgarian mortgages in the UK is unregulated, the protection of the Financial Service Authority does not apply. Anyone with a contract to represent a Bulgarian bank’s products can do so without training or fear of the ramifications. As such, pick your broker carefully; are they asking you for fees before they tell you which products are available or which banks those products come from? If so, best to walk away.
There are some very clear facts in the market at the moment; as of 13th February 2009 Allianz Bank, DSK, Raiffeisen Bank and KCB Bank have all stopped lending to foreigners. The key active lenders are now; United Bulgarian Bank, Piraeus Bank, MKB Union Bank and Alpha Bank. From those that are active we know that very few applications are being accepted, even those that are above and beyond the criteria required, in one case a bank employee told us that currently 90% of applicants are rejected. Greek owned Piraeus Bank, popular with Brits due to their London office, launched their latest mortgage on 9th January 2009. It does not allow lending for studios, thus ruling out the majority of buyers, and will not approve any loan for less than 50,000 Euros. A seemingly acceptable policy change in order to reduce risk, however the reality is that since its launch we are yet to see a single applicant be granted more than 50,000 Euros from Piraeus.
Contrary to popular belief, all mortgages are calculated on the figures produced by an independent evaluator; what the buyer agreed to pay, what the developer claimed it was worth or what an estate agent could sell it for are all totally irrelevant. If we take the ski resort of Bansko for example; it is very rare for any evaluation to come back at more than 1000 Euros / sqm, typically it will be 800 Euros / sqm. Naturally the banks will assess lending based on a consideration of the value, the client in question and what it is prepared to risk on any given property. However, in this current climate the banks have set their glass ceilings and almost regardless of the property value, quality or location they won’t lend above it.
Applicants fortunate enough to get approved for a mortgage are confronted with the news of exactly what percentage of their valuation they will be allowed to borrow. Unfortunately, in this current climate it is never the percentage described in the product and those advertising 70-80% LTV (Loan to Value) are actually only lending 50-55% LTV in reality.
Of the active lenders in the market the advertised amounts available are as follows:
MKB Union Bank: 35% of valuation only
Piraeus Bank: 70% of valuation, minimum lend 50,000+ Eur LTV, not for studios,
Alpha Bank: 80% of the valuation, vast majority of applicants are declined.
United Bulgarian Bank: 70% of the valuation, expect 50-55% only
With regards to interest rates, currently Bulgarian savings accounts achieve an average of 8.5% interest, as such it is very unlikely that any bank would lend money at rates below this. Brokers with products at 4.9% are simply practising false advertising, others showing 6% interest rates are for the first year only and always average out to be more, normally above 9% over the life of the loan .
Looking to the future, we expect a further withdrawal of mortgage products from the marketplace over the coming 6 months, as such our advice is to apply via worthy brokers as soon as possible. Make sure they are actually working with the active lenders and not just in business to take your application fee and then say ‘sorry, the bank said no’. New Estate Finance is part of the New Estate Group www.newestate.biz our products can be viewed under our mortgage section.
As a synopsis, if you or your clients are looking for a mortgage;
* Work on only achieving a lending of 400-500 Euros /sqm at the maximum.
* Don’t expect the application process to cost less than 800 Euros in total.
* Don’t work with a broker who will charge you the full amount all over again if your first application fails.
* Don’t expect to achieve more than 55% of the independent valuation of your property.
* Do expect the valuation to be less than you paid.
* Do expect the application process to take 2-3 months
* Remember that it is possible to begin the application process when you only have Act 15
* Remember that is it impossible to get a mortgage approved and paid to the developer before Act 16 is granted.
on its soils are not fairing so well. The rapid decline of available mortgage products is now clearly evident, for foreigner buyers who didn’t pay cash this will prove to be the greatest catalyst for foreign owned repossessions in Bulgaria in 2009.
The offering of Bulgarian mortgages in the UK is unregulated, the protection of the Financial Service Authority does not apply. Anyone with a contract to represent a Bulgarian bank’s products can do so without training or fear of the ramifications. As such, pick your broker carefully; are they asking you for fees before they tell you which products are available or which banks those products come from? If so, best to walk away.
There are some very clear facts in the market at the moment; as of 13th February 2009 Allianz Bank, DSK, Raiffeisen Bank and KCB Bank have all stopped lending to foreigners. The key active lenders are now; United Bulgarian Bank, Piraeus Bank, MKB Union Bank and Alpha Bank. From those that are active we know that very few applications are being accepted, even those that are above and beyond the criteria required, in one case a bank employee told us that currently 90% of applicants are rejected. Greek owned Piraeus Bank, popular with Brits due to their London office, launched their latest mortgage on 9th January 2009. It does not allow lending for studios, thus ruling out the majority of buyers, and will not approve any loan for less than 50,000 Euros. A seemingly acceptable policy change in order to reduce risk, however the reality is that since its launch we are yet to see a single applicant be granted more than 50,000 Euros from Piraeus.
Contrary to popular belief, all mortgages are calculated on the figures produced by an independent evaluator; what the buyer agreed to pay, what the developer claimed it was worth or what an estate agent could sell it for are all totally irrelevant. If we take the ski resort of Bansko for example; it is very rare for any evaluation to come back at more than 1000 Euros / sqm, typically it will be 800 Euros / sqm. Naturally the banks will assess lending based on a consideration of the value, the client in question and what it is prepared to risk on any given property. However, in this current climate the banks have set their glass ceilings and almost regardless of the property value, quality or location they won’t lend above it.
Applicants fortunate enough to get approved for a mortgage are confronted with the news of exactly what percentage of their valuation they will be allowed to borrow. Unfortunately, in this current climate it is never the percentage described in the product and those advertising 70-80% LTV (Loan to Value) are actually only lending 50-55% LTV in reality.
Of the active lenders in the market the advertised amounts available are as follows:
MKB Union Bank: 35% of valuation only
Piraeus Bank: 70% of valuation, minimum lend 50,000+ Eur LTV, not for studios,
Alpha Bank: 80% of the valuation, vast majority of applicants are declined.
United Bulgarian Bank: 70% of the valuation, expect 50-55% only
With regards to interest rates, currently Bulgarian savings accounts achieve an average of 8.5% interest, as such it is very unlikely that any bank would lend money at rates below this. Brokers with products at 4.9% are simply practising false advertising, others showing 6% interest rates are for the first year only and always average out to be more, normally above 9% over the life of the loan .
Looking to the future, we expect a further withdrawal of mortgage products from the marketplace over the coming 6 months, as such our advice is to apply via worthy brokers as soon as possible. Make sure they are actually working with the active lenders and not just in business to take your application fee and then say ‘sorry, the bank said no’. New Estate Finance is part of the New Estate Group www.newestate.biz our products can be viewed under our mortgage section.
As a synopsis, if you or your clients are looking for a mortgage;
* Work on only achieving a lending of 400-500 Euros /sqm at the maximum.
* Don’t expect the application process to cost less than 800 Euros in total.
* Don’t work with a broker who will charge you the full amount all over again if your first application fails.
* Don’t expect to achieve more than 55% of the independent valuation of your property.
* Do expect the valuation to be less than you paid.
* Do expect the application process to take 2-3 months
* Remember that it is possible to begin the application process when you only have Act 15
* Remember that is it impossible to get a mortgage approved and paid to the developer before Act 16 is granted.
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