Answers - Mortgage

Melissa asks,
“What are the penalties for lying on a refinance application? Claiming that you are married…when you are not. What if the ex-wife forges the signature? What are the ramifications?”
Lying on a Mortgage Application
My answer:
I expanded the question to include lying on any type of mortgage application. This is a form of [...]

Here’s the question:
“I recently paid my mortgage in full, but the country records office has no proof. How do I show them I don’t owe the mortgage company any more money? What is the process and proof my mortgage is paid in full?”
My Answer:
Once a borrower has paid the mortgage in full, the [...]

The question…
“I am applying for an FHA loan with my fiancé who is divorced and still owns a home with his ex-wife. The divorce decree says that this ex-wife is responsible for the mortgage payments and the house is to go on the market when their son turns 18.
However, our mortgage broker [...]

The question…
“Can anyone explain to me about mortgage interest credit? I have read many documents and just need it in simple term. Any help is greatly appreciated!”
My answer:
Mortgage interest credit is a credit for days of interest if your mortgage closes and funds within the first 5 days of the month. It’s [...]

Here’s the question…
“My wife and I are purchasing a new build and set to sign closing papers in December. The mortgage company wanted to try to get me to lock in at 6.50 and i told them that that rate was much higher than the going rates for an FHA at 6.00,two days later [...]

This is a great question because I’ll bet a $100,000 not one mortgage broker in a thousand knows the answer to the question or abides by the rules.
Lender Redisclosure Requirements
Redisclosure rules are set down in the Real Estate Settlement and Procedures Act…a Federal law and I found the section covering redisclosure.
Here it is …
19(a)(2) [...]

Here’s the question….
“My ex-boyfriend and I bought a home together and now he has skipped at least 2 or 3 payments. He will be moving in a few days, it was to my understanding that since he was the “Borrower” on our mortgage, and I the “Co-Borrower”, that he would no longer have his [...]

Here’s the question…
“My wife and I are in the process of finding a mortgage broker, we’re going to check out the one her brother used. This mortgage broker said that they don’t charge points, so I assume they will make their money from Yield Spread, which is the lender giving her a rebate for boosting [...]

Here’s the question,
“Can a mortgage company, in this case the dreaded Litton Loan Servicing, pay my past due property taxes without my consent, thus creating a negative escrow balance which I am expected to rectify?
I know as alien-holder they can purchase homeowners insurance if the owner lets it lapse, but do they have the same [...]

Here’s the question…
“We have a son that can no longer afford the mortgage payment on their home. We want to help and thought he might have an assumable mortgage. I know that was possible once upon a time. What is the procedure for assuming a mortgage. Will I have to pass [...]

Here’s the question…
“I am considering an interest-only mortgage. The payment will be less, that I know. Does that mean the rate is less…or is the payment less only because it’s interest only? But are there any other aspects of the mortgage I’m not aware of? It all sounds too good to be [...]

In a word…”Maybe”.
With the mortgage meltdown in full swing, it might seems logical to believe even good credit applications are being denied. It’s not true. However, due to dropping home values especially in “high risk” areas like California and Florida, lenders are looking to limit exposure in these areas.
Reasons Mortgage Applications [...]

This is a very interesting question, one I must say I’ve never heard or thought about before.
With that said, it is just like the title company choice, the appraiser choice, etc you have the “right” to buy services from any source, but the question really is, “Is your choice any better than your originating [...]

Mortgages containing balloon payment terms work like this: you pay a monthly payment of principal and interest at a slightly lower rate than a non-balloon mortgage in exchange the lender expects you to payoff the loan early in the form of one last “balloon” payment. The balloon payment is the entire remaining balance of the [...]

Here’s the question:
“The mortgage broker I am currently working with says that he can only get a 15 Lock and it can be extended at a cost of $125 every time I extend. I am doing a HUD sales through FHA and my contract states I must close within 45 days. Shouldn’t I be able [...]

I think it’s best to pay off one’s mortgage before turning 45! But given that’s not the question, I’ll repost it here then answer:
“I will retire in about 2.5 years. I have a small mortgage, $100K. I have heard that it is best to pay off ones mortgage before retiring. My financial advisor says keep [...]

I’m going to post the whole question before answering:
“At closing we were told the buyer did not actually have their loan approved yet. The sellers purchase of of a new home was contingent on the closing. The buyers realtor says she will buy the property if they can’t close in seven days. Can any action [...]

Here’s the question…
“I am currently separated and wondering what what happens to the mortgage on our family home. Is it possible to get a freeze on the mortgage payments until we get a final divorce?”
Mortgage Payments During Separation
My answer:
I am going to assume you mean “stop paying” when you say “freeze…
…and the answer then [...]

Here’s the question before I answer:
“In 2009 my rental property interest rate will become variable and I’ll honestly dont think I’ll be able to afford it. I owe $197,000 on the loan. I had a recent homes sold report for the area high $159,900 and low $109,495. Once the rate goes variable should I just [...]

The whole question,
“Hi, I have a construction loan and about to close on my fixed loan. The house went over my budget about 44,000.00. Now the estimated payment is to high. What options do i have?”
Construction Loan To Permanent Mortgage Options
First you could attempt to renegotiate the sales price and see if the builder is [...]

Here’s the whole question before we begin:
“I wanted to know if you could help me and my wife. We have an 80/20 mortgage with 2 separate mortgage companies and currently owe $245,461.01 on the first mortgage (at 7.3%)and $57,896.97 for the second mortgage (at 12.5%) for a total of $303,357.98. My problem is the houses [...]

The question:
“Is PMI better than LPMI ? I have 15% down available but since i don’t have the balance of 5% to avoid it altogether I need to pick. The lender is suggesting to go with PMI. Is LPMI better?(2nd mortgage is not available as an option)”
My answer:
You are correct to note [...]

Here’s the question…
“I was told by my real estate agent that 30 year loans don’t…no actually…can’t have prepayment penalties. Is that true?”
In a word, “No”.
The terms of mortgages are not set this way.
For example, the old subprime and Alt-A loans, many had 30 year fixed rate terms and still included a prepayment penalty.
I [...]

Question first, then the answer…
“I am being told by my refinance company 2 months is normal to get my loan closed…to just be patient. Is that true? Does it really take a big company 2 months to close an easy refi?”
Wow…that is bad!
The number of days to close a loan should be between [...]

The question…
“What happens to the mortgage and the payor if the mortgage holder or lender goes under? I need to know the answer from both points of view as I hold a mortgage as a lender (an old seller carry back) and I pay on my mortgage as a home owner.”
This is a good [...]

The question first…then my answer.
“I was under the belief that if my lender was holding funds in escrow for my taxes and insurance, I was owed some nominal rate of interest. Is that true? What if they over escrow…I get the money back, but shouldn’t they have to pay me interest at least [...]

That’s a great question.
The rates we quote on the daily podcast are the “real wholesale rate” or what’s is known in the industry as the “par rate”.
To understand more about rates and how they are quoted read, “How To Read Mortgage Rate Sheets”
Bank Rate Quotes
Bank rate quotes always add to the wholesale rate [...]

The question…
“My loan guy told me yesterday all VA mortgage come with a .25% or a quarter of a discount point. He gave some reason for the charge, but I always thought discount points were optional. I’d pay points only if I wanted a lower rate. Something smells bad…what is it?”
You are [...]

Here’s the whole question…then I’ll answer it.
“I just reread your article “How to Read Mortgage Rate Sheets“. In your example, you give 2 costs for obtaining the same $200,000 mortgage.
The right way = $2,328.00
The wrong way(YSP) = $4,996.00
My question:
Is $2,328.00 the entire total cost of the loan? Does this include closing costs and everything else [...]