Your Questions About Mortgage

Nancy asks…

What does it take for a mortgage company to set a closing date on a home sell?

My problem is that we have a contract on our house, the person who offered on the house has submitted all the necessary paperwork to their mortgage company, and has received her commitment letter back from them; however, a closing date has yet to be set. My realtor tells me that the ladys application is through with the underwriting, the commitment letter from the bank was received last week and we are just waiting on the mortgage company to get all of the numbers together and email that info to the title company. We have been waiting a week today, why can no one give us a closing day? How long should this take? We feel like something is wrong but no one will tell us? Any opinions?

admin answers:

I use to do closings in an attorneys office for purchases and refis. There are a million possible reasons for the delay, but I am sure that none of them are acceptable.There is no reason why you should be waiting on the mortgage company if there is already a commitment letter. 99% of the time when I was doing closings it came down to the seller or the title company being the hold-up for the closing, not the mortgage company. I would call and seriously complain! As a seller I am sure you probably have your own deadlines regading your new residence. Your real estate agent needs to be sticking his/her neck out and bugging the heck out of someoen to get the ball on the move!

Sandy asks…

Should I get a fixed rate mortgage if I plan to remodel right away?

Hi all,

I am planning to buy a house with 5-10% down, but I want to remodel the kitchen and bedroom within the next two years. I expect this will add to the value of the house, making my loan-to-value ratio closer to 80/20. Do you think I should get a mortgage with an ARM, if it has a better rate, and then refinance once the remodeling is complete? Any other suggestions for the mortgage?

admin answers:

Speak to your lender about a FHA 203K loan. The 203K loan is sometimes refererred to as a “rehab loan”. With a 203K you can have the kitchen/bedroom remodel costs put into your initial loan. The rehab must have estimates up front and also must be done by an approved contractor.

The home must be able to be appraised at the completed price. For example:

Say the home is listed at $150,000 and has an old outdated kitchen and bathroom. Before making an offer you get estimates from an approved FHA203K contractor for remodeling the kitchen and bathroom. The estimates come in at $30,000.

An appraiser will then appraise the home as if the remodel has already been done. As long as the home appraises at $180,000 you will be able to get the loan.

A big advantage to doing it this way is you do not need to have that $30,000 in hand or need to borrow the money later at higher rates. The rehab is done right away so you do not have to live with the outdated kitchen/bathroom. Your monthly payment on the loan on 150K vs 180K should amount to around $180/month additional.

Sharon asks…

How do I find out the mortgage company of a condo in foreclosure?

I live in a three unit condo. The second unit is vacant (the owners moved out 2 years ago) and the unit is in foreclosure. We (the condo association) needs to contact unit 2’s mortgage company for back payment of unpaid condo fees. How do I find out their mortgage company?

admin answers:

Probably there are back taxes too. You could contact the court house and ask about the deed. Also, the Tax authority should tell you where the tax bills go.

David asks…

I just took out my first mortgage on a home. How long do I have to wait before I can refi for a lower rate?

With the average mortgage rates dropping, I am wondering if there is a minimum amount of time you have to pay on your mortgage before you can refinance? 1 year?

admin answers:

You can refinance now. There is no set time you have to wait unless you have a pre-payment penalty on your existing loan. Refinancing your home has to make sense by either putting you in a better financial position or serve a special purpose.

Common reasons to refinance:

– Lowering your interest rate or term of your loan (from a 30 year fixed to say a 20 year fixed)

– Debt Consolidation Refinance where you pay off non-mortgage debt by using the equity in your home (credit cards, auto loans, students loans, etc.)

– Using the equity in your home to pay for a major expense

– Swiching from an adjustable rate mortgage to a fixed rate mortgage

If you got your loan through a mortgage broker, they would really appreciate you not refinancing for about 4 months.

Thomas asks…

What happens with the 2nd mortgage when I give the 1st mortgage holder a deed in lieu of foreclosure?

I am unemployed and cannot pay the mortgage payments. I have the home on the market but it will not sell for the loan amount. I was thinking of giving the 1st mortgage holder (80%), a deed in lieu of foreclosure. Will the second mortgage holder (20%) be able to get any money or be able to file a judgment against me as home owner? I live in the State of Arkansas.

admin answers:

They will not take the deed, they would rather foreclose, but either way the second will follow you.

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