Do you remember when the iPhone first came out? About a week before it hit store shelves, an on-line sports book published odds claiming that 1 in 20 shoppers would be trampled to death while trying to get one. Coincidentally, those are also the odds in any given week that someone will be behind on their mortgage payments.
Are you one of them?
If you are, you realize that the stench of fear permeates your being, as you approach the unfamiliar territory of foreclosure. You don't have to be a bum or a deadbeat to get into this position. It can be as simple as missing a few days of work or having a mortgage payment or two wind up in the Dead Letter File at the post office. Either way, your payment’s late or you're in deep doo-doo with your lender. Now your lender's threatening you with the Big “F” -- foreclosure.
The last thing you want or need is to face the stigma of foreclosure, so you're seeking any port in a storm. The best way to get out of this mess – if you can come up with the cash – is reinstatement. The concept is simple: Pay your lender what you owe. In return, your lender will call off the hounds and allow you to continue with your mortgage contract as if nothing has happened. This could be a practical and doable option if your problem is a short term financial hiccup.
In practice, however, it could be a pretty tall order because you'll be required to catch up your payments – with late fees – in one single lump sum payment. Most lenders stipulate in your contract that partial payments won't be accepted. While it's possible to pay less than the full balance of your back payments, it isn't as likely an outcome. If you can work this out, you'll need to get it in writing and the only chance you have of making it happen is if you can satisfy the lender that the conditions that led to your being late won't be repeated. If you're able to convince your lender to accept a lesser amount, it will likely take an act of Congress and your first born child. In addition, this sort of an arrangement will take some time to negotiate – time you probably don't have.
When you're in this precarious financial position, you're at your lender's mercy. It's just you and your lender. Instead of being intimidated or bullied into making a rash decision that could have a dramatic impact on your financial future, you should enlist the help of a trained professional, someone who will be in your corner, looking out for your best interests – not the bank's.
By calling The Grant Hickman Team, you'll get sound advice from an objective advocate that will act as a counterbalance to the power of your lender. Then you can decide for yourself whether reinstatement of your mortgage is the best course of action for you. Then maybe you can consider getting an iPhone – but only if you're willing to run the risk!
Monday, June 23, 2008
Monday, June 16, 2008
Escrow Account Analysis
by Shawn Tihen, Bankers Home Lending, (314) 520-3649
By now, you have probably received your “Escrow Account Analysis” in the mail from your mortgage lender. Like most of us, you probably asked “What does this all mean?”
Escrows are the monies you set aside each month with your lender to pay your taxes and homeowner’s insurance when they come due. Taxes in Missouri are due at the end of the year and the premium for your homeowner’s insurance is due annually from the date of your policy inception.
When you closed on your loan, we deposited the proper amount of monies into your escrow account so that amount plus your monthly escrow contribution should cover the payments as they come due. It’s also important to note that by law a lender keeps a two to three month cushion in this account to accommodate minimal increases in your taxes or insurance.
If the amount of taxes or insurance paid is lower than anticipated, then this creates an overage in your escrow account and you are due a refund. If, as usual, the amount of taxes or insurance due is higher than anticipated, then this creates a shortage in your account and this causes you to owe more money.
In general, the big culprit of these shortages is your tax bill. Property taxes are re-assessed every two years with the most recent assessment in 2007. There was a substantial increase in taxes, so you most likely had an escrow shortage. Therefore your lender presented you with two options.
Send them a check upfront and they will adjust your monthly payment by a smaller amount so you aren’t short the next time those bills come due.
Send them nothing and your payment will adjust by a larger amount to make up for the shortage and to make sure you aren’t short the next time those bills come due.
My recommendation has always been option two, but of course every situation is different.
30 Year Fixed 6.375% with 0 points
15 Year Fixed 5.875% with 0 points
FHA 30 Year Fixed 6.125% with 0 points
By now, you have probably received your “Escrow Account Analysis” in the mail from your mortgage lender. Like most of us, you probably asked “What does this all mean?”
Escrows are the monies you set aside each month with your lender to pay your taxes and homeowner’s insurance when they come due. Taxes in Missouri are due at the end of the year and the premium for your homeowner’s insurance is due annually from the date of your policy inception.
When you closed on your loan, we deposited the proper amount of monies into your escrow account so that amount plus your monthly escrow contribution should cover the payments as they come due. It’s also important to note that by law a lender keeps a two to three month cushion in this account to accommodate minimal increases in your taxes or insurance.
If the amount of taxes or insurance paid is lower than anticipated, then this creates an overage in your escrow account and you are due a refund. If, as usual, the amount of taxes or insurance due is higher than anticipated, then this creates a shortage in your account and this causes you to owe more money.
In general, the big culprit of these shortages is your tax bill. Property taxes are re-assessed every two years with the most recent assessment in 2007. There was a substantial increase in taxes, so you most likely had an escrow shortage. Therefore your lender presented you with two options.
Send them a check upfront and they will adjust your monthly payment by a smaller amount so you aren’t short the next time those bills come due.
Send them nothing and your payment will adjust by a larger amount to make up for the shortage and to make sure you aren’t short the next time those bills come due.
My recommendation has always been option two, but of course every situation is different.
30 Year Fixed 6.375% with 0 points
15 Year Fixed 5.875% with 0 points
FHA 30 Year Fixed 6.125% with 0 points
Monday, June 9, 2008
Falling House Prices are a Good Thing
New home sales rose in April for the first time in six months. But in an article written by St. Louis Post-Dispatch author Jack Naudi this past weekend, the falling house prices could have been a good thing. Naudi believes first-time buyers and anyone trading up can now buy a house for a smaller down payment and lower mortgage than this time last year.
"For every $5,000 you reduce the price of a house, you can cut your down payment by $1,000, and your monthly mortgage by about $25 for a 30-year fixed mortgage at 5.75 percent.
"In eight months, a married couple buying a house will have more money to either save or spend than they will get from President George W. Bush's tax rebate. And the couple will continue to save $300 every year. Now, that's a stimulus package!
"However, what about those who counted on rising house prices for their nest egg?... Most homeowners are counting on their houses to fund their golden years. Even if you believe your house is an investment, you need to understand that it's highly illiquid. And if your house is your primary investment, you're facing huge risk from lack of diversification."
"Most importantly, buy a house sensibly, understanding that its true value is psychological, social and emotional — not financial."
In St. Charles, buyers and investors have many choices when determining their long-term investment strategies. The Grant Hickman Team can help you find a home to grow old in or a kid-friendly neighborhood to start a family. And, we work closely with financial advisers that know our local economy. Call today for a financial referral or let us help you find the best place for you.
"For every $5,000 you reduce the price of a house, you can cut your down payment by $1,000, and your monthly mortgage by about $25 for a 30-year fixed mortgage at 5.75 percent.
"In eight months, a married couple buying a house will have more money to either save or spend than they will get from President George W. Bush's tax rebate. And the couple will continue to save $300 every year. Now, that's a stimulus package!
"However, what about those who counted on rising house prices for their nest egg?... Most homeowners are counting on their houses to fund their golden years. Even if you believe your house is an investment, you need to understand that it's highly illiquid. And if your house is your primary investment, you're facing huge risk from lack of diversification."
"Most importantly, buy a house sensibly, understanding that its true value is psychological, social and emotional — not financial."
In St. Charles, buyers and investors have many choices when determining their long-term investment strategies. The Grant Hickman Team can help you find a home to grow old in or a kid-friendly neighborhood to start a family. And, we work closely with financial advisers that know our local economy. Call today for a financial referral or let us help you find the best place for you.
Monday, June 2, 2008
Around St. Charles County
- June 1: Renaissance Faire at Rotary Park in Wentzville - Admission
- June 3: Free Concerts from 5:30 - 8:30 pm bring a blanket or chairs to the Civic Park in O'Fallon
- June 6: Fridays at Frontier in St. Charles live music from the '80's
- June 6: Party at the Park at Wapelhorst from 6:00 - 8:00 pm Family event - Free
- June 7: Fleur-de-Lis Festival from 10 am - 6 pm on 2nd Street in St. Charles - Free
- June 7-8: Renaissance Faire at Rotary Park in Wentzville - Admission
- June 10: Free Concerts from 5:30 - 8:30 pm bring a blanket or chairs to the Civic Park in O'Fallon
- June 13 - 14: Olde Tyme Picnic in Old Town Park St. Peters
- June 14: Louisiana Purchase Day celebrated 9 am to 5 pm at Daniel Boone's Home in Defiance - Admission
- June 14: St. Louis Symphony Orchestra at Frontier Park in St. Charles - Free
- June 15: Community Big Jazz Band at Frontier Park at 7:30 pm
- June 17: Free Concerts from 5:30 - 8:30 pm bring a blanket or chairs to the Civic Park in O'Fallon
- June 19: Divine Wine at the Vine from 5:00 - 7:00 pm wine tasting to benefit St. Charles Crisis Nursery
- June 20: Shakespeare in the Park at Frontier Park at 6:30 - Free
- June 24: Free Concerts from 5:30 - 8:30 pm bring a blanket or chairs to the Civic Park in O'Fallon
- June 26 - 28: New Melle Festival, Family Night Thursday and parade Saturday at 12:30 pm
- June 27: Friday Night Flicks in Frenchtown starting at sunset on the 1800 block of North Second Street St. Charles
- June 28: Bluegrass Festival in Augusta on Jackson Street from 1:30 - 8:00 pm - Admission
Subscribe to:
Posts (Atom)