Tag Archives: mortgage payment

Does A Mortgage Payment Include The Taxes And The Insurance ?

Mandy asks…

Does a mortgage include property tax and insurance?

My girlfriend and I are looking at buying our first home.   The house is listed at $259,900.  The estimated mortgage that is being shown on the ad for the house is only $1,320.00.  So it seems that it is very cheap for that price. 

This is the first time that we have gone through this as being first time home buyers. I’m just curious that there are no other costs and that we can afford the payment.  And that includes everything so just want to make sure we really can afford it and no surprises.  Thanks.

admin answers:

No.

Sorry but it looks like that $1,320.00 is more than likely nothing more than just the interest and principal.  Meaning that it does not include the taxes and the insurance that is most likely required by your lender for most first time home buyer loans.  Not to mention depending on what type of loan you are getting you will also have Principal Mortgage Insurance (PMI).

I know on many forms of Real Estate forms of advertising whether that be the internet or some kind of print advertising some really nice low payment.  Sorry to say that is not the full picture of what the real mortgage payment is.  Its not that its bait and switch its just not really giving the full picture.  It really is the payment for the loan but the reality is that it is not what your lender will require you to pay for the loan.  It is meant to entice you and get you to call for more information.

For example in Santa Barbara county using 1.25 of the purchase price not the loan amount then dividing by 12 will give us an estimate of your payment for taxes.   That will give you an extra $270.00 a month.  Now being that you are a first time home buyer and if you are not getting a VA loan and getting maybe a FHA loan you will be looking at PMI which is currently a 1.35% factor than divide by 12 giving you $282.00 additional on top of your loan payment.  Now you still have to get homeowners insurance which is required by the bank to have you can choose who you get insurance from, but lets just add $70.00.  So your real payment out the door with nothing else to add unless you are living in a gated area or something like that wiht homeowners Association fees (HOA) your REAL payment would be more like $1,942.00.  I hope this is more of a clear answer for you and good luck!

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How A HARP Loan Can Help You

I recently did a Harp loan refinance for a client of mine.  First off let me say she was already refinancing with a bank in town and after 6 months of working with that bank and after paying for the appraisal she was told that they could not do the refinance.   The loan was a little difficult but not impossible and it did require some extra work on my part.  Not only was I able to do the loan, and get the financing for her but I was able to request a an appraisal waiver so she did not have to pay for another appraisal.   In the end her mortgage payment went from $1,500.00 to $1,150.00.  Now to make things clear she was upside down in her mortgage.  Meaning she owed more on her mortgage than what her house was worth.

The family basically got a raise in their household income by doing nothing other than refinancing their home and taking advantage of the HARP loan program.  It was that simple.  The HARP loan program was just recently extended again till 2015.  What the program does it allows homeowner that are upside on their homes to refinance and lower their mortgage payments by refinancing to the lower interest rates of today.   Now there are a few conditions to this loan in order to qualify.

1)      The loan has to be owned by Freddie Mac or Fannie Mae purchased by them no later than May 31, 2009.

2)      You must be current on your loan and have had no lates on your loan within the last 6 months.

3)      You still have to qualify for the new loan based off your credit and income.

 

The most important thing to remember about the HARP loan is that even if your upside on mortgage and you owe more than what your home is worth you can still possibly refinance your home to take advantage of today’s lower interest rates.

Any questions just shoot me an email and I can see if your home qualifies as well as what is possible.

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Buying A House After A Foreclosure

Just about everyone at this time has been touched by the mortgage collapse and it would be hard to find anybody which did not know somebody which had to go through a foreclosure or a short sale on their house.You may have recieved something either in the mail or left on your door stating how its better to do a short sale instead of a foreclosure .
It is very possible to get a loan right after your short sale if your bank allowed you to do a short sale without missing any payments. Getting the approval on the short sale sometimes can be kind of tricky, usually the bank wants you to not make the payment before they will even consider allowing you to do a short sale.
If you did miss mortgage payments in doing a short sale you will have to wait at least 3 years before you can get an FHA loan, now thats 3 years from the date of the short sale not from the date you started to fall behind.  Sometimes losing your home through a foreclosure or a short sale does not make a difference in regards to how fast you can buy a home again if you are going through a FHA loan although it will in a conventional you will have to wait 7 years if you were foreclosed on.   So after those 3 years expire you can put down payment on a home using an FHA loan with merely 3.5% like everyone else trying to get a home loan.
When looking at other loans that are not FHA loans there are some differences. loan, and getting a regular loan.  Currently Freddie Mac and Fannnie Mae are the two biggest investors at this time.  These two big govt. sponsored corporations are buying the majority of the loans that the banks are doing.From the date of closing your short sale your waiting period is only 2 years to get another home loan.  But please keep in mind if you are on another loan whether it is investment property or you co-signed on it, there can be no mortgage lates within the 12 months of the application.  That is a big difference when it comes to getting back into the market.  Credit is also going to be a determing factor.

Homes are much less now than they were 3-5 years ago and more than likely there will not be any dramatic price increases in the next 2-3 years.   In closing if you find yourself in a position of possibly having to do a short sale it could actually be a blessing in disguise.  If you are struggling to make those payments on a house that is only worth its value in today’s market. 

Focus on rebuilding your credit and saving money as much as you can during the short sale process.  Some short sales can last as long as a year, so that is an entire of not making any mortgage payments.  So save, save, save and you could possibly have another home just as nice as the home you had to walk away from and with only have the mortgage payment.

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Can You Have Two FHA Loans ?

Lizzie asks…

If I move and rent out my home under a VA loan, can I buy a house at my new location with an FHA loan?

I purchased a home in summer 2010 using a VA home loan. I expect to be PCS’d (Permanent Change of Station) in 2013. Due to the market, I doubt I can sell my home after only 3 years, but would still like to own my home at my next duty station. I would like to rent our current home after we leave. Because we are just starting out I won’t be able to build up my savings to afford 20% down, so I have been looking at my options. Can I purchase my next home using the FHA program and not have the VA or the FHA people sending me letters?
My credit is currently around 760.

We would have time to put renters in our house before purchasing another. And either way, we will effectively have 2-payments, whether we are renting at our new location or purchasing at our new location. I dont see being able to even break even on our current home yet and therefore we cannot sell it before moving.
Also, our household’s current income is around $7000 before taxes not including any rental income.
Thank you for the insight rswpbc.

admin answers:

Yes you can as long as you qualify with both payments. Since you have no history of being a landlord they may or may not let you offset the payment with rent, and if they do it will only be 75% of the rental income.  Will be the max you will be credited but more than likely even if  you are positive in the rent you will not be given enough credit to offset the mortgage payment.  If the other home does not have at least 30% equity you will need to qualify with both mortgage payments.

To correct other posts…only under very few conditions may you have 2 FHA loans at once. But for the most part the you can only have one FHA loan at a time.  FHA is 3.5% down, not 3%. Also keep in mind that this year the PMI factor is going up and from now on the PMI on a loan is for the life of the loan vs. only 5 years due the the FHA being in the red.

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