[知識] Managing the Mortgage

[nikko]

Do I have any recourse against a bad faith estimate?
What Happens When You Skip a Payment?
Have I Been Credited For My Prepayment?

[nikko]

The good faith estimate (GFE) is one of several government-required disclosures that you will receive at the time of or within three days after application. It is a legal requirement that all residential mortgage lenders must follow.

The borrower should hold the lender to this estimate, with some obvious leeway. The good faith estimate is subject to change, but the lender has an obligation to immediately disclose those changes as soon as they are known. The lender must inform the borrower immediately of any changes in the loan program, rate, pricing and closing costs.

As a rule of thumb, the borrower should be concerned if the final closing costs are more than 15% higher than the estimate. The exception is if the borrower is fully informed by the lender beforehand that these items will be higher, and the borrower accepts. Note also that other expenses not anticipated by the lender may appear during the processing period. If they are legitimate, they will often be unavoidable.

http://www.dignitymortgage.com/ApplyRes/About_the_good_faith_estimate.htm

There are numerous ads today talking about no fee mortgages, but all of these may not be trust worthy. The fees in such cases may be in a disguised form like higher interest, high prepayment penalty or high margins. So you need to be more evaluative about the overall costs checking the terms of the mortgage thoroughly. Any confusion that may arise can be cleared out with a reliable mortgage professional.

The most important source of information on the fees aspect of a particular home loan is the good faith estimate (GFE), which is provided by the lender. Now we will take a look on how to use this document for the evaluation purpose.

The GFE contains all the relevant information about the mortgage like the rate of interest, the term of loan, the amount of loan and the details and split-up of all the settlement costs related to the loan. And as per the federal law the borrower must be provided with a GFE within three days of his loan application. The fees on the document are listed under three main headings

Rate of interest and discount points

Fixed dollar loan fee and

Third party charges.

The unreliable lenders can easily use figures under each of these categories to trick the borrower, as the lender cannot be held liable for errors in this document as per law. Still it is the most evaluative tool and the lender can easily withdraw his loan application if he finds that there is too much of a difference when comparing it with the final settlement document. Anyways, we shall right now just try to understand how to read a GFE.

The borrower must maintain a copy of the GFE to compare it with the final settlement documents, before putting his signatures on the loan documents. The GFE is also known as a mortgage loan disclosure statement (MLDS), if it is prepared by the broker and not the original lender.

Collect the GFEs from all lenders and then go for an item wise comparison. In cases of major differences you may ask the specific lenders for a clarification on the unusually high prices.

http://www.yourdictionary.com/business_profile/debt/homefinance/motgage-lender.html

"What do I do if I am unhappy with my lender for some reason?"

Call your loan officer and let them know of your concern. Most loan officers are fine, reputable people and will quickly resolve any concerns you may have.

If that doesn't work then call and ask to speak with a supervisor or manager. Typically, the manager will be a more experienced person and has additional authority to help you resolve your concerns.

If that doesn't work then the HUD Office of Consumer and Regulatory Affairs, US Department of Housing and Urban Development is here to help you. Each year they "recover" nearly 9 million dollars for mortgage consumers who have been dealt with unfairly. If your particular problem doesn't fall under their jurisdiction then they can also point you to the right State or Federal Office which can.

http://blog.pacesettermortgage.com/2005/11/lansing_how_to_.html

[nikko]

A mortgage that involves a borrower who is behind on payments will be reported as delinquent mortgage. If the borrower cannot bring the payments up to date within a specified number of days, the lender may begin foreclosure proceedings.

http://www.foreclosuresmass.com/help/view/glossary/termid/319

Some creditors will occasionally allow customers to skip a monthly payment. This is especially common during the holiday season. While these offers might seem attractive, be aware of the cost of skipping payments.

The practice is most common among credit card issuers, but other creditors, including mortgage and loan companies, make similar offers.

Some creditors assess an additional fee when customers decide to skip a payment, others do not. When an additional fee is assessed, it is commonly called a deferral fee.

Skipping a payment increases the cost of credit, even when a deferral fee is not assessed. That is because interest continues to accrue on the unpaid balance during the time period the payment is skipped. Since there is no payment to reduce the balance, more interest will accrue.

If a creditor agrees to allow a customer to skip a payment, the creditor may not charge the customer a late fee for the payment that was skipped and may not report that payment as delinquent to credit bureaus.

http://www.wdfi.org/wca/consumer_credit/credit_guides/skip_payments_offers.htm

[nikko]

Prepayment rules for individual loans and specific lenders vary. For details, contact your lender, ask how your loan can be prepaid, and get answers in writing. Some lenders have monthly forms which automatically allow for prepayments while others have more exotic and complex prepayment programs. Whatever the lender's preferences, always track your loan with care to assure that all extra payments are fully credited to principal reductions.

In the case of a curtailment, before making a lump-sum payment obtain instructions in writing from the lender. If big money is involved, or if the loan is being paid off, get assistance from a real estate attorney.

http://realtytimes.com/rtcpages/20001128_prepaymtg.htm

You can also use a amortization calculator to generate an amortization schedule (by month or by year) as well the monthly payment for a mortgage paid either monthly or bi-weekly. It can also demonstrate the effects of prepaying your mortgage on an irregular (one-time) or regular (monthly or annual) basis.

http://www.hsh.com/calc-amort.html

[nikko]

When determining whether you want pay for points, think about how long you expect to live in the house. Over a short time frame — less than five years or so — paying points usually doesn't makes sense, as you will pay more in points than you will save in interest. However, if you plan to stay in the house for 10 or 20 years or longer, points will pay off over time. Although the prospect of paying a few thousand dollars more initially isn't very attractive, you may be able to save money over the duration of the mortgage.

Generally speaking, it takes about five to seven years to recoup the cost of paying a point upfront. Here's the math. Let's say you take out a $100,000 30-year fixed mortgage, and you have the option of either paying 6% with no points or 5 3/4% with one point. With the 6% mortgage, your monthly payment will be $600. And with the 5 3/4% loan, it would be $584, a savings of $16 per month. After about 62 months, or a little over five years, you would have recouped the $1,000 point you paid upfront. And then you would start to benefit from the lower monthly payments.

But you must also consider how you might otherwise invest that $1,000. If you can beat the taxable equivalent of your mortgage rate (about 8% in the example above for those in the 25% tax bracket) then don't bother paying points. Invest the money instead. As you'll see from the worksheet below, however, we believe 6% is a prudent estimate for long-term returns.

You can finance points, which allows you to pay them off as part of the loan. But this increases the cost of your points, and it will take longer to break even. If you can, pay for the points in full at closing.

http://www.allbusiness.com/personal-finance/real-estate-mortgage-loans/3381-1.html

http://www.smartmoney.com/home/buying/index.cfm?story=points

[nikko]

When your first mortgage is paid off, usually by refinancing, your second mortgage will need to be subordinated. This means that the lender will have to gain permission from your second mortgage holder to do a new first mortgage in first lien position. If the lender didn't get a subordination agreement from your second mortgage company - the current second mortgage would fall to first lien position - and obviously have less risk. And the new first mortgage the lender were doing would be in second position - and since the risk is higher - the rate would be higher.

http://www.goodmortgage.com/mortgage_school/MS_2nd_mortgages.htm

This process can help you to avoid any reimbursement of fees for early payoff on your equity loan or line of credit. At the same time it can save you money in the form of fees to establish a new equity loan or line of credit. The requirements for a subordination review are minimal and are items you have already submitted to your first mortgage loan officer. We simply need to review these items to make a final decision on your subordination request. A final decision is usually given within 3 business days depending on us receiving a complete package of information in a timely manner. Your first mortgage loan officer should be familiar with subordinations and can help to expedite the process for you by forwarding the requested information.

http://www.keypointcu.com/keypoint.cfm?tn=std&menuid=88&navids=3,88&pageid=151

Very few borrowers who take out a second mortgage are aware that the second mortgage lender can prevent them from refinancing their first mortgage. When the existing first mortgage is repaid, the existing second mortgage automatically becomes the first mortgage – unless the second mortgage lender is willing to subordinate his claim to that of the lender providing the new mortgage into which the borrower is refinancing.

Policies of second mortgage lenders regarding subordination vary all over the lot, from a small fee and no conditions to absolute prohibition. Borrowers taking a second mortgage should get the lender's subordination policy, in writing, before they close the loan.

http://db.inman.com/inman/content/subscribers/inman/column.cfm?StoryId=040304JG&columnistid=guttentag