I would probably not allow someone to take over your payments unless you have absolutely no way to sell the property and are facing imminent foreclosure. It is possible to sign away your rights on a property(executing a quit claim deed) and leave someone with the obligation of making your ongoing mortgage payment. This is known as selling “subject to” the existing mortgage. There has been much written on subject to real estate transactions. A common practice is for the subject to buyer to make your back payments and then agree to make the payments going forward. This is usually... Read more →

When buying a home many people rightly consider purchasing life insurance. The problem with buying life insurance through your mortgage company is that it will cost you much more than purchasing a simple term life insurance policy. This question has come up for years, the idea of buying an insurance policy associated with a car loan, a mortgage, a credit card, or other installment agreement. This is a huge profit center for financial institutions and many of them put a great deal of pressure on consumers to take this coverage. Rather than having multiple insurance policies, and over-paying for them,... Read more →

I would probably not allow someone to take over your payments unless you have absolutely no way to sell the property and are facing imminent foreclosure. It is possible to sign away your rights on a property(executing a quit claim deed) and leave someone with the obligation of making your ongoing mortgage payment. This is known as selling “subject to” the existing mortgage. There has been much written on subject to real estate transactions. A common practice is for the subject to buyer to make your back payments and then agree to make the payments going forward. This is usually... Read more →

This is a great question and one that puzzles me personally. Short term rates, like the Fed Funds Rate, are not the same as long term rates, such as 30 year mortgages. These are two different animals. Unfortunately, the uninformed media reports that mortgage rates will fall in direct proportion with short term interest rates, this is just not true. The only exception to this would be those that have an adjustable rate mortgage that is tied to a short term index, such as the prime rate. It is true that a short term rate cut will lower some credit... Read more →

I have to tell you right out of the box, that I am concerned with the premise of your question. The notion that your adults parents need your permission to enter into this transaction is very troubling to me. I have recently addressed the issue of reverse mortgages, and to the surprise of many readers I think they are a good option for people in certain situations. The fees are high, but for those retirees that need to be free from a mortgage payment and increase their income, these programs have much to offer. Let me suggest that you set... Read more →

First, for those unfamiliar with bi-weekly mortgages, I want to provide a brief overview. A bi-weekly mortgage is based on making half of your regular monthly payment every two weeks. At first glance, some people may not see any difference between paying every two weeks and just once per month. Due to the irregular number of days in each month, there is an occasional fifth week. As a result, over the course of a year, bi-weekly mortgage arrangements collect the equivalent of thirteen full payments as opposed to just twelve. By making just one extra payment per year, you can... Read more →

Many people are surprised when I tell them that I think reverse mortgages are a great option for people in retirement. Too many retirees today are living without enough money to enjoy their retirement, and some without the funds to even cover their medical needs. For those with a home that is substantially paid off (at least 50% equity), the value of their home may be the key to a better retirement. The concept of reverse mortgages is very confusing, but need not be. A great book on this subject is Reverse Mortgages for Dummies. A reverse mortgage allows individuals... Read more →

President Bush signed into law this week a “tax cut” for people in foreclosure. Under the prior law, if your house was foreclosed and sold for less than the mortgage balance, you would have to declare that amount as income! Yes, I know it is hard to imagine, but this was the law. The concept is based on the principle that the mortgage companies loss had to be declared as a gain by the person to whom the loss was attributed. For example, if you owed $200,000 on your mortgage and ended up in foreclosure and the auction of your... Read more →

While I have historically been an advocate of homeownership, I am not really sure where I stand on that today. Due to the current crisis in the housing market, there are many parts of the country where rent is so cheap that it makes no sense at all to buy. For example, in my own local market there are 3,000 square foot homes near the ocean renting for $1,200. To buy a home like this would require a payment of $3,000 per month or more. Even with the tax benefits associated with owning a home, renting is still a better... Read more →

One option in foreclosure, known as “deed in lieu of foreclosure” gives borrowers a quick way out of a foreclosure lawsuit. By agreeing to give up ownership in your home to your lender without a legal fight, you should be able to avoid owing any money if your house sells for less than your mortgage balance at auction. When a home goes into foreclosure, in most states the lender must file a lawsuit (judicial foreclosure states). The foreclosure lawsuit ends with a judgment of foreclosure and the house is then sold by the court at a public auction. By fighting... Read more →

FHASecure is available, but seems to have big problems. I had a lengthy discussion yesterday with a loan officer at a lender that was offering the program. FHASecure, launched several weeks ago, was intended to be a way for Americans to get out of adjustable rate mortgages and secure long term fixed rate financing. President Bush enacted the program in an effort to provide relief for those losing their homes due to the current subprime crisis. From the FHA Website here is a basic description: WHAT IS FHASecure FHASecure is a refinancing option that gives credit-worthy homeowners, who were making... Read more →