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mortgage loan

Performance Property Real Estate Question

Do Mortgage Borrowers Need Credit Life Insurance

Q: I bought a house last month and I received an offer for credit life insurance. Do you think it’s a good idea to buy credit life insurance? Lance, Woodbridge, NJ A: Credit life insurance is a specialized type of insurance that provides financial protection for mortgage borrowers and their families in the event of the borrower’s death. Credit life insurance is often tied to the outstanding balance of the mortgage loan. Credit life insurance will cover the remaining mortgage balance if the homeowner passes away before the loan is fully paid off. Lenders may include the cost of credit life insurance in a mortgage borrower’s loan principal which means that interest will accrue on the combined amount which means […]

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Performance Property Real Estate Question

What Landlords Should Know About DSCR Loans

Q: I am a real estate investor. I need a mortgage loan but I’m having trouble getting a conventional loan like the one I got when I had a regular job. What can I do? Dee, Vauxhall, NJ A: DSCR loans allow landlords to qualify for a home loan without having to fork over personal financial information like tax returns or W2s. DSCR stands for debt service coverage ratio and a DSCR loan is a type of no-income verification mortgage loan. DSCR loans are ideal for landlords who own income-generating properties, particularly when they can’t qualify for a conventional loan. The main benefits of DSCR loans are ease and speed. The reason why lots of personal financial information is not […]

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Performance Property Real Estate Question

How To Get A 3% Mortgage Loan Today

Q: Is there any way to get a low mortgage interest loan right now? Mindy, Montclair, NJ A: 30 year fixed annual mortgage rates right now are at about 8% which is much higher than they were in recent history. One way to get a lower mortgage rate when you buy a home now is by assuming a loan from a home seller who currently has a mortgage loan with a lower interest rate. Most home buyers don’t know about mortgage loan assumptions. When a buyer buys property and assumes a mortgage, the buyer becomes primarily liable for the debt. Although FHA is currently only processing about 3,000 mortgage loan assumptions per year, more than 20% of all active mortgages […]

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Performance Property Real Estate Question

3 Benefits & 3 Drawbacks Of Reverse Mortgages

Q: Gerald, you previously mentioned some of the disadvantages of reverse mortgages, are there any advantages? Hillary, Washington D.C. A: A reverse mortgage is a special type of home equity loan sold to homeowners aged 62 and older. Here are 3 advantages of reverse mortgages: It takes part of the equity in your home and converts it into cash payments The money you get is usually tax-free and generally won’t affect your Social Security or Medicare benefits. The loan doesn’t have to be repaid until you or your spouse sells the home, moves out, or dies. Here are 3 disadvantages of reverse mortgages: When you get a reverse mortgage, you don’t receive the full value of loan Higher-than-average closing costs, […]

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Performance Property Real Estate Question

How The Return Of Stated Income Loans Affects Real Estate

Q: Gerald, my mortgage broker told me that he offers stated income loans now.  How will the return of stated income loans affect real estate? Carl, Bronx, NY A: Stated income loans are often cited as one of the main causes of the financial crisis of 2008. In the early and mid 2000s, banks approved home mortgages without verifying income, pay stubs or tax returns. Since the financial crisis, banks have tightened lending restrictions for mortgages. In fact, current regulations put lenders who fail to verify a borrower’s ability to repay a loan at risk of having those mortgages challenged in court. Stated income loans have made a comeback recently nonetheless. The Dodd-Frank Act of 2010 essentially made stated-income home […]

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How Much Should Closing Costs Be on a Mortgage Loan?

Q: How much should closing costs be on a mortgage loan? Henry, North Bergen, NJ A: The closing costs associated with a mortgage are usually different for each customer based on the type of mortgage they get, the property location and the amount of the loan. Mortgage loan closing costs may include appraisal fees, title insurance fees, attorney fees, pre-paid interest and documentation fees – to name a few. During the process of getting a mortgage, you are supposed to receive a good faith estimate which itemizes your closing costs in advance of your closing date, so it’s important that you review your good faith estimate to make sure you aren’t being overcharged. Thanks for your question, Henry, good luck. […]

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How Long Should it Take to Get a Mortgage Loan?

Q: How long should it take to get a mortgage loan? Veronica, Flushing, NY A: Well that’s a good question, Veronica. Mortgage approval is a multi-step process which includes underwriting, which can take some time. The lender or mortgage broker you choose and the number of applicants they have in their pipeline will impact how long it takes to get a mortgage as well as your individual financial situation. If, for example, your financial condition is very simple and straight-forward (i.e. your employment is stable and have no debt) the process will generally be faster and can take just a few weeks. However, if you’re situation is more complicated (i.e. you’re self-employed, own several other houses, have gone through a […]

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