Many of the closing costs for a reverse mortgage are similar to a refinance, and you’ll need title insurance and a survey and escrow charges…

Because a cash-out refinance requires the homeowner to make monthly payments back to the lender, which sort of defeats the purpose. Furthermore, reverse mortgage funds…

That depends upon a few things, but reverse mortgages are primarily calculated based on the age of the borrower (loan-to-value numbers are triggered by life…

Anyone who owns their home, lives in it, and is age 62 or older can qualify. There are no credit or income qualifications for a…

A reverse mortgage is designed to help older Americans who own their homes by paying the homeowner cash in exchange for the equity in their…

Nothing, really, except that you’ll be sending your mortgage payment to another lender. Lenders can make money by collecting monthly interest payments, or they can…

A modifiable mortgage is a mortgage loan that allows its interest rate to be modified, even if it’s at another lender. It sounds similar to…

A recast applies to ARMs and is used when extra payments are made to the principal balance. When you make a regular payment on your…

A note modification is taking the original terms of the note and reducing the interest for the remaining term of the loan, without changing any…

Maybe. You’ll have to qualify all over again, just as when you bought the home, so if you’ve experienced some credit problems, such as collections,…

Because the lender is adding mortgage interest that you’ve yet to pay your current lender. When you refinance your mortgage, your new loan officer will…

If all you’re wanting is to have access to some of the equity in your home, then take the HELOC. They’re inexpensive (sometimes free) and…

Good question. There are some very important considerations here when refinancing a mortgage that has subordinate (second) money behind it. First, given enough equity, many…

You can do a couple of things, actually. And they’re fairly easy. The first is to get an equity second mortgage on your house for…

A cash-out refinance is the exact same process as a refinance, only this time you come away from the closing table with a check in…

You can. For some people, paying the same amount each month, every month, is a little more ‘‘automatic.’’ Payment by payment, more money goes to…

Changing your loan term along with your rate may also be a good reason to refinance your mortgage from a 30-year to a 15-year loan.…

I’ve never been a big fan of paying discount points and origination charges on any loan, purchase or otherwise. If you paid a discount point…

A refinance is a brand-new mortgage, that’s why. You will have new title insurance, a new note, a new lien, a new everything, mostly. Yes,…

No, you can close a refinance anytime you want. I’ve had clients in process for months before they decided to take the plunge and refinance…

That’s a fair question. If you applied the refinance test solely to owning the home longer than it takes to recover the fees, then it…

A rescission period is a unique feature of refinanced mortgages and only applies to your primary residence. It’s a three-day grace period that lets you…

No, and I’ll explain why. The real test is how long it takes to recover your closing costs using your new lower payment, compared to…

There are many reasons, but the primary one is to reduce the interest rate on your current mortgage loan. If your rate is at 8.00…

That depends on your perspective. Subprime loans have been around for years, and while they have always had higher default rates, they had never had…

In my opinion, it’s whether or not your lender or loan officer is a greedy crook. People with damaged credit have had it rough enough…

Now, that’s predatory. Foreclosing on a home is not on the list of top-ten things a bank likes to do. It’s expensive. It’s messy. And…

People have been trying to define exactly what a ‘‘predatory’’ loan is, with varying degrees of success. By general definition, a predatory loan is designed…

Then don’t refinance. That’s the inherent risk on a couple of fronts. First, rates might in fact be higher when you go from a subprime…

That’s always up to you to decide. But subprime lending provides home ownership opportunities to a class of people that normally would be entirely shut…

It’s not uncommon for them to be higher in fees, albeit not by much when compared to conventional loans. But there’s the rub. Since lenders…

A lot. Typically the caps, if there are any, are much higher with subprime hybrid loans; at the same time, they carry higher margins. With…

Prepayment penalties are common on subprime loans, much more so than on conventional ones, where prepayment penalties are rare. These penalties are usually ‘‘soft’’ in…

They’ll be higher than rates with a conventional product, there’s no doubt about that. But how much higher depends on your grade. The lower the…

Nothing’s the matter with them, other than that their interest rates and terms are less favorable than loans for people with good credit. You just…

Not necessarily. As with other loan types, it can depend upon your credit, but there are low-money-down subprime loans and even zero-money-down subprime loans for…

Believe it or not, most any mortgage company can help. But it’s important not to jump to any conclusions. There have been many misconceptions about…

Units that are bought under a time-share agreement, condotels, mobile homes, and properties that are particularly unusual. Time-Shares A time-share is a property that you…

Most definitely. Conventional mortgages finance a maximum of four units, including duplex, three-unit, and fourplex buildings. More than four units attached and you’re looking at…

You may want to for several reasons. One might be for simplicity’s sake. I recently had a client who had—hold onto your seat—nearly thirty retirement…

Because such loans would cost you more. Each time a risk element is removed from a loan program it’s offset with either more down payment,…

With an AUS, the better the borrower, the less documentation is required. If you have difficulties finding enough documentation for parts of your loan, simply…

Hopefully, yes. That’s one of their jobs. Good loan officers, especially good mortgage broker loan officers, always keep a keen eye out for the newest…

Because the amortization term is squished in half. With a 30- year mortgage there’s plenty of time to spread out interest payments, but when you…

Of course you do, as long as the lender offers it. Most loans start as low as ten years, but terms can be anything between…

Sometimes, but not always. If you can put a minimum of 20 percent down, that might be ideal, provided you have the funds available. It…

The first and perhaps foremost consideration is how much you intend to put down. Loans with no money down have higher interest rates and can…

Most loans still will accept a Fannie or Freddie approval using an AUS, and simply ask that the loan officer document the file just as…

Yes, in most cases, you should try for a conventional loan first. There are more conventional loans and conventional lenders than any other type, which…

Get a loan that you feel comfortable with, one you don’t have to worry about and that is easy to get in terms of qualifying…

There are two types of ‘‘Alt’’ loans, Alt-A and Alt-B, and they’re called so because they’re not conventional or government loans but step outside the…

This is a loan program where you pay every two weeks instead of once per month. Such programs, which are good because they can help…

There’s another way to get financing and that’s called a wraparound mortgage, or a ‘‘wrap.’’ A wrap mortgage is a mortgage ‘‘wrapped’’ around another mortgage.…

A lease-purchase agreement, also known as rent-to-own, is a viable option when someone wants to buy a property but isn’t quite there yet. Or if…

Seller financing is certainly an option, as long as the seller knows about it, of course. You’ll go through a lot fewer hoops to qualify…

A payment option ARM has been around for a long time as well; it’s just a different take on a neg-am loan. A payment option…

A negative amortization (neg am) implies that when you take the loan you don’t amortize, meaning you don’t automatically pay it down over a set…

An interest-only loan requires only that you pay the interest on your loan each month, so you don’t have to pay any part of the…

Yes, but there’s also a bonus. Fannie and Freddie both have the same conforming limits, but they also set the maximum loan limits for what…

As often as you like, but you can’t have more than one VA loan at a time. If you bought a home with a VA…