CAN YOU REDUCE YOUR MORTGAGE PAYMENT WITH OUT REFINANCING OR MODIFING YOUR CURRENT LOAN? THE ANSWER IS YES?

 

I get this question often when I meet with clients to discuss their future financial situation.  No matter what anyone tries to sell you, you can with out a doubt reduce your mortgage payment with out having to refinance your home mortgage loan.

There are a few things that you need to consider when thinking of lowering your mortgage payment.  So Ill start with the easy stuff then make a run for the more difficult things needed.

 

Step one,

Does your loan have BORROWER paid mortgage insurance?

That’s right,  You must check if you have borrower paid mortgage insurance.  This is a pesky payment that goes to your lender and they pay your insurance provider.  Don’t get this confused with your hazard insurance for your home. This particular insurance is for the lenders benefit.  This insurance will cover you if you default.  they will pay a certain amount of money to your lender to minimize their loss.  So lets clear this up.  Mortgage insurance is an insurance that you pay for but that benefits only the lender.

The mortgage insurance that you pay month to month will be the basis of your reduction.  Keep this in mind when reading the rest of the steps.

Step Two,

12 MONTHS on time payments.

Although most lenders will automatically remove your mortgage insurance, this wont happen soon enough.  They typically wait it out according to your amortization schedule.  Now with that said most lenders have a manual removal tool they rarely use.  If you have been on time with your mortgage for the first 12 months or more you will be allowed to seek a Private Mortgage Waiver.  All you have to do is call in and speak to your lender’s mortgage insurance department and ask for the documents to be sent to you.

Step 3

Fee Paid

Okay I did not say this was going to be free!  Yes you will most likely have to pay a fee for the waiver to be considered.  However don’t pay this fee until you finish reading below.

Step 4

Value Check. 

Now why do you have to do this?  Its simple.  The lender forced you to get mortgage insurance for one simple reason.  You entered a mortgage with very little money down.  So you have very little money to lose.  That translates in to very easy for you to pick up and walk away from your home.  So here is the rule of thumb.  If you are wanting to be considered for a Mortgage Insurance Waiver make sure you have 78% ltv.  Example if you own a home worth $100,000.00 and only owe $78,000.00 you are a great fit for the Waiver.

Here is what I would do for a good value check.  I would call a local realtor, explain your intentions and offer to pay them for a CMA.  This is a Current Market Analysis.  This would give you a great idea of what your value is on your home as this would be a price that the realtor would list your home for on the market.

You can also reach out to an appraiser.  They will give you a very close value to the CMA.  Either way is good.

Step 5

Return Documents to lender

Fill out all documents leaving no blanks and send them back to the lender.  Make sure you include a hand written letter telling them that you need to get the Mortgage insurance removed.  Send in your CMA or Appraisal to back up your value.

Step 6

Hurry and Wait

Yes Yes Yes, You will wait and wait and wait.  They will take no less then 30 days to get to your documents and send out their own value check method.  Once the value is verified they the move on to instructing the internal departments to remove your MI.

So yes there is a way that you can reduce your mortgage payment with out having to refinance.  It might not be easy or free, but it is worth every penny.

Try this out.

What getting rid of CA Prop 13 Means to you

In 1978 the state ratified the California constitution and added measures to protect home owners against unfair taxation.  Here is a portion of prop 13

Section 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.

The proposition decreased property taxes by assessing property values at their 1975 value and restricted annual increases of assessed value of real property to an inflation factor, not to exceed 2% per year. It also prohibited reassessment of a new base year value except for (a) change in ownership or (b) completion of new construction.

In addition to decreasing property taxes, the initiative also contained language requiring a two-thirds majority in both legislative houses for future increases of any state tax rates or amounts of revenue collected, including income tax rates. It also requires a two-thirds vote majority in local elections for local governments wishing to increase special taxes. Proposition 13 received an enormous amount of publicity, not only in California, but throughout the United States.^[2]

^{Thanks Wikipedia.}

 

^{Don’t be fooled when you hear our state tell you that they need to get rid of this or repeal this proposition.  They will use all tactics on this.  They will say that they will have to cut education, public safety, and other public programs.  All in lieu of taking a great part of our protection away.}

^{If this gets repealed we will be opening the door for further taxation on real property.} 

^{At some point we have to tell the government that we can not pay any more taxes.  they have to make good with all the money they are currently taking in.  In the last years we have seen taxes jump in many places.  We don’t need to see taxes go up on homes.} 

^{Our state officials need to understand that more tax revenue is not the answer to the problem.  It’s a spending issue too.  They can not just keep taking from home owners to spend on expensive cars, trips, and a great lifestyle.  It is your hard work and it should be your hard earned money.}

^{I hope you all are able to help stop the movement.  Remember with the super majority the democrats have in our Great State they do not need to ask what tax can go up or what new tax they can push.  They can just snap their fingers and it’s a done deal.}

It’s a government for the people by the people.  Wake up and demand that the state constitution not be changed.

The fiscal cliff is just a few steps away! Are you strapped in and ready for the fall?

As the year winds down, and we count how much we spent for those little gifts there is a dark cloud in Washington D.C. No, no, not rain, not snow, it's the two biggest heads in our nation. I will not mention any names in the hopes that you all can self determine who they are.

Here are a few things that might be useful to remember.

First and most important. We the people have the cards in our favor. What do I mean with this you ask? Only we as consumers decide how, when, where, and why we spend money. This is a very important issue. Since we as consumers own our financial future, only we can start the distraction of our great economy. If you have a job and make money.....spend it. Yes yes I said spend it. Wisely but spend it. If you need shoes buy them, if you need that morning Joe, go get it. I don't want you to think I'm telling you to go out and spend all your savings, but don't change your spending habits because of some over rated issue like this cliff. What's the reasoning behind this? Well it's easy. Listen yes I know our lives were turned upside down over the last few years, but remember we are only going back to the old tax rates. I mean how much is a few bucks less a week any ways. Yes you might say I'm nuts, or that I have gone mad, but that beats the flip side. Sit on our hands and wait for the big heads in DC to save us at the cost of our kids and grand kids.

Second and just as important jump on the phone with your tax consultant. Ask the important questions. The most important is how will falling over the cliff will affect you.
If you are undergoing a Modification or a short sale, you need to find out how any balance forgiveness will harm you. Ask them if there is a way around having to pay taxes on those amounts.

Third I would recommend that if you have a 401 k or something similar, you should talk to a financial advisor ASAP to see if gold is a good option. If you have your money in a unstable market you will most likely not want to run the same risk that you did a few year back. Remember gold is a great way to make sure your future is secure. Silver might be an option as well. So reach out to your financial planner. If you don't have one I can give you a few good guys who can help.

Four Please refer to number 1,2, and 3.

If you have any questions let me know. I'll do my best to help you strap on and get ready for this wild ride that's coming.

AGENTE EXCLUSIVO DE EDGAR RODRIGUEZ DEL GROUPO DUETO VOSES DEL RANCHO

Que mas puede pedir uno.  Mi Cliente y Gran amigo Edgar del groupo Dueto Voces Del Rancho me consagro unas buenas palabras por dar buen servicio y attencion. 
Muchas Gracias Edgar.  Como siempre es un placer servir a mis clientes y Amigos

Porque no se compra su casa?

 

Le he preguntado esta a mucha gente.  La verdad no entiendo la razon que me dan.  Las respuesta mas comunes son:

No tengo pa el down payment.

Mi credito esta un poco danado.

 

Voy a escribir un poco de las dos respuesta porque creo yo que mucha gente no entiende que estos son puntos muy negativos.

El Primer Punto

Asi como estan las cosas hoy en dia en nuestra economia se entiende porque gente piensa esto.  La verdad si es muy bueno cuando uno cuenta con un ahorro.  Este ahorro tipicamente te ayuda sostener economicamente su familia en caso que pase un imprevisto.  Pero uno se tiene que dar cuenta que puede comprar una casa con menos de 1% de enganche.  Eso es muy poco. 

Ahorra usted puede preguntar o especular que estos prestamos son como los prestamos que estaban dando cuando eran muy famoso los fraudes.

NO! Te digo estos prestamos son respaldados por el gobierno.  Son programas que ofrece el FHA para ayudar a gente comprar.  Lo estan haciendo porque hoy en dia los precios estan muy bajos y los intereses estan casi casi regalados.  Antes uno no verificaba nada de informacion.  Ahorra uno tiene que comprobar que uno tiene trabajo y paga sus taxes.  Ya no es como antes que solo si tenia pulso podias comprar.

EL RESULTADO

Hoy puede comprar una casa con tan solo $750.00 de engancho.  WOW uno dice.  Mas bien uno dice que es mentira.  Pero la matematica no miente.  Aqui esta el ejemplo

Casa que vale $150,000.00

Su down payment es de 1/2% (Medio Porciento) es igual a $750.00

Su pago de principal y interes sera de $756.23 por mess (utilizando un interes promedio de 4.5%)

Ahorra si lo piensas bien uno gasta mas en renta que pagando su propia casa.  Hoy en este momento ahi 3 propiedades de venta por menos de los $150,000.00

Digo piensalo bien.  Vale la pena o no?

 

Ahorra para retomar el segundo punto.  Sobre el credito.  Su credito antes era muy importante.  En los anos despues de la derumbe del mercado de Real Estate era muy estricto.  Ahorra estan mucho mas flexibles.

Ahorra les comento que con estos dos pontos aclarados QUE ESPERA EN COMPRAR SU CASA.

Bush tax breaks might be history

The very tax break that is helping our real estate market recover and allowing lenders to work with home owners to avoid getting kicked out of their home is now at risk of ending.

What does that mean for home owners who can no longer pay their mortgage, and are not willing to just give up?

Lets start with the current incentive for home owner to leave their home.

Lets take two major lenders who are paving the way for our market recovery. Bank of America (BofA) and Chase.

Both BofA and Chase started offering a cash on sale incentive above and beyond what the current HAFA incentive can offer. They are offering up to 30 thousand dollars at the close of escrow.

Now lets put this into prospective. You bought a home 4 years ago that you can no longer pay today. You are now forced into a bad situation. You can ride the defaulted loan wave and see where it takes you, or you can take action. When you finaly choose to take action (assuming you choose the correct decision by selling your home) you list your home at a fair market value, and the sale yields a massive loss.

For example

In 2006 you bought a home for $375,000.00 on an adjustable loan. Today your loan adjusted and your payment jumped almost twice of what you were paying. Then you lost your job. You now have to miss payments and since you don't have any money coming in you don't qualify for a modification. Your next step is to sell your home. When you put your home on the market you discover its only worth $210,000.00. So you still have a balance pending.

So this is how you have a short sale. The lender will most likely allow you to sell your home for less than what you owe, and in turn they will send you a tax form for the balance that was not paid called a 1099. The tax form translates to income to you in the IRS's eyes. (MONEY YOU MADE) Now here is where the Bush tax cuts help. If you lived in the home you can currently tell you tax preperer and they can get you out of paying taxes on that fake income. Once you and your agent close escrow you can get a check for up to 30 thousand dollars.

If the Bush tax cuts expire this will change. A client who chooses the correct route and short sells a home they live in they will now have to pay the full tax penalties on the "earned income" or better knowned as the pending balance.

Now depending on how much you normally make in a year this amount will most likely raise your taxable bracket by a few. Resulting in a massive tax hike.

If you are or know someone in this situation please be warned this will affect you/them.

Is there hope? Yes and unfortunately. Its political. The United States Senate and House of Rep. need to compromise, and send a bill to the President's office to be passed. This is easier said then done.

I ask everyone to embrace for a disaster. Here is why, there are so many aspects of the Bush tax cuts and so much government spending that if there is a compromise it would be hard to say if this prevision of the tax cut will survive. Heck its like rolling the dice.

Here are the biggest things to watch according to the way I see things.

1 Watch the president and his position. He wants to raise taxes on the wealthy (over 250k yearly income)
2 The Senate is mostly with this idea so count on strict opposition to anything else of what the presidents wants
3 Please watch the Republican House. I have heard 2 positions first and most unlikely is to allow the tax cuts expire. This will toss us off the so called Fiscal Cliff. It will raise taxes evenly, wealthy and middle class. It will also cut in to our massive government spending.
Another position is to negotiate and compromise with the Senate to come to an agreement.

Now I see a cross road we will have to face. The right offers economically correct choices but are harsh to our global economy. The left offers very comfortable options and increases our dependence on the very ones who pay the most of our tax revenue.

Over all I write this so we can plan ahead. We have to be READY for what ever comes our way. Make plans to negotiate not only with mortgage lenders but to negotiate with the IRS and any other lien holders who you owe money to. Build yourself a power team. A great agent like ME, a great tax advisor, a good IRS negotiator, and a real estate attorney if needed. this way you are covered for all aspects of the outcome.

I will update this as soon as I have more info and hear more bi or uni partisanship projections.