Your Questions About Mortgage

John asks…

What happens to a mortgage if the economy collapses?

What could happen to a mortgage if the economy collapses and the pound, dollar or Euro loose most of their value? How would you continue to pay or would you loose anything?

admin answers:

It is your ability to pay the Mortgage payments that have a bearing not what a currency does,as long as you can meet your obligation you should be ok,what may change is the value of your property,as long as you meet the payments and ride out the storm you should do ok.housing is in shortage in the UK but for now purchasers are few,but in time that will change.We have been there before.

Michael asks…

How long does it take for a mortgage decision to be made?

We are going through a mortgage broker and 3 days ago filled all the paper work in to apply for our mortgage. How long does it take for a decision to be made. We are first time buyers and really anxious on the outcome!!!!!
Thanks guys for your answers. Im talking about the process of the bank deciding if your a suitable candidate to loan the mortgage to ?

admin answers:

It depends, honestly, on what paperwork is actually completed and what you mean by a “decision.” I don’t mean to sound like a politician here, but there are mutliple definitions at work in the lending business.

If you completed just the loan application and Borrowers Authorization (to pull your credit), then the broker should be able to tell you within minutes if you’re pre-approved, but this doesn’t constitute a loan approval and does not go to an underwriter for review. This would be a pre-application and pre-qualifying.

If you have a home under contract and have completed all the disclosures, then the broker has the option to send it to underwriting for credit approval or to hold your paperwork until the remainder of the documents are in. If it wasn’t submitted to underwriting, then you’re not waiting for a decision, per se, but you’re waiting for the rest of the documents. If it was submitted to the underwriting team, it would probably take 3-4 days. This would be an application and credit approval.

If the broker is holding it until the additional paperwork is in, it might take a week to get the paperwork and another 24-48 hours for underwriter review. (In addition to your paperwork, the mortgage broker has to verify your employment and bank balances, order title work, survey, appraisal, and, depending on the loan type, do other work himself/herself.) This is final application and final approval.

But wait — there’s more! Nearly every file is “approved with conditons,” meaning the underwriter has questions about something that was submitted and will not actually offer final approval until those conditions are met. It can be anything from whether or not the appraisal is accurate to where a large deposit showing on your bank statement came from. Once the conditiosn submitted, THEN you can get final approval. (Of course, the underwriter might have more questions — that does happen.)

So, to summarize: If the file is first submitted for credit approval and then additional documents are added, it’s usually 24-48 hours after the last document; if the entire file is submitted at once, it *should* be just 3 days, but 5 days isn’t unreasonable. It all depends on the underwriting team’s workload. But, as you can see from above, your signing your share of documents doesn’t mean the file was ready for underwriting.

But, honestly? I’ve had files take two weeks to turn around from the date of last document submission. This past January, when rates were down to 4.5 percent, everyone’s underwriter’s were buried with refinances, and it took that long.

I’m sure that was confusing, but I hope helpful as well. There is no simple answer because additional information is needed to fully answer your question. I’m happy to respond via email, if you would like to clarify.

Nancy asks…

What is the minimum credit scores for mortgage approvals in nj?

Hello,
Im trying to plan for a mortgage. If we had about 50k saved up and we wanted a 300k mortgage what credit scores would we need to get approved.
Lets say these are the circumstances:
husband has had a steady job for 2 yrs
Wife has been consistently working but not at the same company
income range is 70-80k a year

Thanks!

admin answers:

Three weeks ago this would have be a piece of cake to answer – now who knows — if you really do some research and look into maybe buying one of these bad mortgages the govt is going to pick up — with that much down payment you should be able to talk a great game!!!

Donna asks…

why is a mortgage called a mortgage and a car loan called a loan when they do the exact same thing?

The question seems straight forward. A mortgage is secured by property and an auto loan is secured by property as well, so why is one called a mortgage and the other called a loan?
Good answers, but this is not really a question of how loans work, but rather a question as to why they are named differently. That is why I posted this in word play instead of finance.

admin answers:

The word Mortgage is a Law French term meaning “death contract,” meaning that the pledge ends (dies) when either the obligation is fulfilled or the property is taken through foreclosure.

The loan (any auto or otherwise) is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan.

Carol asks…

Can I claim mortgage interest after being legally separated?

I was legally separated in July, 2009 and my wife got the house. We made mortgage payments together up to our separation date (6 months). She made the mortgage payments for the remainder of the year. Can I claim half of the mortgage interest on my taxes?
I’m filing single.

admin answers:

I’m from Canada, so this answer may not be correct. But, in Canada I’m pretty sure you can’t claim interest on your taxes unless you are running a business from home.

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