Shout out to Silky17 and Battleweary....Mortgage stuff...

Discussion in 'Fibromyalgia Main Forum' started by orachel, Sep 14, 2005.

  1. orachel

    orachel New Member

    Hi Guys! Heres all the mortgage / property value info you requested. So sorry to take so long to respond! I was here just abt all afternoon yesterday, but I sometimes forget (big surprise, huh? lol) to check back in a post after i answered it to see if any response...

    Ok, Silky,

    (Debbie, that is...I thought your name was really silky!), glad to hear you are dealing with Chase..they're huge and have enough divisions that I'm sure they'll be able to assist you. All really depends on how much you really want to keep your house (believe me, my husband and I bought our Fabulous moneypit of a dreamhome 2 yrs ago, and I'd hate to let it go, but we might have to!) and if you have a lot of equity to work with. My speciality was consolidation and refi....So, I'd take a client with $150K house mortgage, and $30K in other credit cards who was really struggling to make ends meet and had a $200k house value, then restructure program for them and refinance them into a longer term (or sometimes even same term...depends on situation) and lower their pmts by literally a truckload. I've had clients knock their monthly "nut" of bills down $2000!!! But average savings in situation like one above is maybe $500-600 a month....still a HUGE savings in my book. I worked with a ton of clients long before this happened to me who were dealing with disability income and trying to make ends meet. Now, you may or may not be able to qualify for something like that. I dealt with clients who had good-bad credit, but their are a ton of variables like equity in your house, debt to income ratio (after the refinance savings) and disposable income (which can sometimes be a big issue for those with disability).

    If you end up having to go that route, I'd be glad to help talk you thru it or whatever. Sorry I'm not working now or I could do all the work for you! But lets cross fingers that restructure with Chase solves all your problems first, ok?

    I have no idea if roommate affects your SSD...I really don't think it does, because I've had a bunch of clients with SSD who had a "live in" boyfriend who had to sign a lease with rent stated to make the client's SSD income work for a loan...didn't affect them, but maybe they were being sneaky with SSD, and you want to be very very cautious about doing anything like that.

    Mtg Insurance - I don't know what type of mtg insurance you have. If you're talking about your homowners insurance, and it's paid to Chase with monthly payment, it will need to still be paid. What Chase might be able to restructure is your "principal and interest" part of your payment. If your loan is "escrowed" (has property tax and homeowners ins included on monthly basis), that part of the payment will stay the same, period. But 2 things...now that you're on SSD, check with your city/state to see if you can qualify for a waiver or decrease on property taxes due to your disability or income. I've had clients qualify for "Homestead Act", and knocked $100-200 month off mtg pmt in taxes right there! 2nd, you said insurance was with the mortgage company...if you do mean homeowners, and you actually don't have homeowners insurance thru an insurance agency (paid thru chase), but actually have a homeowners policy written by Chase (forced placed insurance, its called), its much much too expensive and you need to get other homeowners policy...that could literally cut your insurance premium in half. Man, this is really a hard thing to help with in writing? lol...if any of this is confusing, just write back and I'll straighten it out.

    Finally, if your "mortgage insurance" is actually a type of optional insurance product you pay Chase for each month, ask chase right away and read the disclosure you got about this insurance at time you closed your loan. It's possible that you might have purchased life insurance that will pay off the balance of your mortgage (God forbid), or you also could have bought DISABILITY INSURANCE along with your mortgage! If you have this, it should literally PAY OFF all or most of your existing mortgage due to fact that you are disabled permanantly with SSD...I'm crossing my fingers that that's what you have! Its expensive, but I used to tell all my clients about it cause it can be a lifesaver for some.

    Ok....any other questions, ask, of course...also, feel free to do the email switcheroo thing with the proctor if you need more detailed personal type advice. I don't know how to get the proctor to give you my email, or I'd have offerred it by now!
    Hope all is well!
    Rachel



    Battleweary....

    To answer your question, I don't know where you live, but if you have that much equity in your house, that is absolutely a great idea. Plus, if you downsize in housing, there are some big benefits in savings (obviously!) and often for upkeep. I live on an acre and a half of english gardens, with an old 1890's cottage on it. My house was my husband's and my dream house, but requires an IMMENSE amount of upkeep! Not to mention all the home improvements we had planned to do ourselves before I got sick! (my house is 1/2 repainted...inside and out!lol...so embarassing, but I'm too sick now to do it!) Plus, my poor gardens are soooo overgrown now, and can't afford to hire a gardener, obviously! So, guy just mows my grass, and all the flowers are exploding all over the place. Its really pretty sad!

    I'll have to find a way to downsize soon if I don't get better, both to save money, and to get simpler home to maintain. I'm in a much worse situation than you, though. My husband and I recently bought our house, and have almost no equity, so we'd be lucky to get our house sold for what we owe now.

    Whether or not there's affordable housing in a safe neighborhood in your area, I couldn't tell you (don't know where you live), but theres tons of ways to find out on the internet. Plus, there's ways of finding out generally what your house is worth on the net, to help you in figuring out what new home you might be able to afford. Let me know if you need help with that. If you're looking at something like a trailer, you should be looking in the neighborhood of $30-70k absolutely max, and that's for a new double wide...I'm guessing, don't price trailers often. Also, manufactured homes tend to be VERY affordable, and some of them don't look bad (or even manufactured) these days. Don't know anywhere warm consistantly, but not really hot other than Los Angeles/California area....I used to live there, and its VERY expensive. 6 years ago I paid about 1,500 per mo for a 2 bedroom apartment in Brentwood...not cheap at all.

    Hubby and I would like to move to Phoenix, AZ are within next 5 years or so. Its gorgeous and very dry there year round, except for abt 2-3 mos in the summer when it is extremely HOT...but even then, not stifling because it's very dry...so no humidity. Property values are pretty reasonable there, also. Others here might be able to give you better ideas about locale. Good luck, and feel free to ask any other questions you have...Oh, and if you're looking at condos and apartments, and even trailers, make sure you ask about Condo Association Fees, Lot Rentals, and Monthly Maintenance. Any one of these could apply, and some dont find about them until waaay into the process of moving. They can often be hundreds of dollars each month, so you need to know right away if they apply!

    Happy Trails!
    Rachel
  2. orachel

    orachel New Member

    for silky17 and battleweary
  3. orachel

    orachel New Member

    I'm glad to help if I can, but I am definitely not a tax specialist, so make sure you confirm this with one, ok? Should be able to call an H&R block, or a Jackson Hewitt and ask them a few questions for free. If not, a very close friend of ours (who lives in phoenix, az...coincidentally since both you and I want to move to AZ!) owns like 6 Jackson Hewitt franchises. I am positive that if you gave me specific questions to ask him, he'd be glad to give you all info gratis. Also, his mom (and business partner!) is a wonderful tax attorney, so you know your info will be 100%, if you need to get it that way.

    Ok, heres' my opinion on your questions...First, some tax laws are state specific...you might have a large tax burden in your state for selling a home, or none at all. As for federal taxes...I'm 99% sure you would have to pay income taxes as a result of the "profit"...difference bet your current mtg and what you get for your house. However, there might be a couple of loopholes there. For instance, you might get a huge tax break because you're immediately using that profit to buy a new primary residence. Also, there are always federal and state programs to protect those who fall into lower income brackets, so if money is a prob (like it is for most of us! lol), you might be able to qualify for one of those! My only other concern, and I have no experience or knowledge at all about this....but if you get SSD or SSDI or long term dis from an employer (sorry, but I just can't remember, and didn't check your profile before I started typing!)its possible that any large chunk of money might affect your benefits, and clearly you don't want that to happen, so please check with someone who knows.

    Finally...I'm such a dufus, sometimes!!! If you're only concern and desire to do all this (move, etc) is because your house payment is too high, there might be another good option for you if you'd like to try to keep your house. If property values are rising like they were when I was in Cali, if you hold on to the house long enough, it could end up making you a TON of money in equity...like, enough for a full retirement package. A close friend in Cali bought a home for 200k in like 1992 or so...sold around 2003 for almost 600K! So, its definitely possible to increase DRAMATICALLY...and property values usually don't DROP in cali...worst case is they stabilize usually.
    My other option for you is to look into (and again, I'll offer any assistance I can) for an interest only mortgage. Basically, this is a loan that all you pay is interest...no principal. But if you already have substancial equity in your house, there should be very little issue with that! Also, property gonna keep going up in value, likely. These are often variable (but you don't have to worry about that...there are some amazingly stable programs out there) and interest rates are usually in the 1-3% range!!!!!! Imagine how much your house payment would go down if you paid no principal at all, and only paid 1-3% interest on your balance! Just another option for you. I can't believe it didn't occur to me before! Good luck and good health to you, and remember I'm glad to help if I can.

    Rachel
  4. orachel

    orachel New Member

    I don't have the energy to type whole thing out again (sorry! but if you read the last few paragraphs of my last post to battleweary (about interest only mortgage), you might at least have an option to keep your house and lower your payment INCREDIBLY. Any questions about it, feel free to page me. Sorry I didn't think of this option sooner! And finally, there's a lot of misconception and misunderstandings out there about this type of mortgage, so make sure you speak to someone who really knows what they're doing. I just got an offer in the mail for 1% interest only today, and would be glad to refer that info to you if you like.

    Hope this is a tiny bit of comfort to you, or at least gives you a little hope about working it out when money is VERY tight. I know how you feel! This being poor stuff is for the birds! lol...
    Rachel
  5. orachel

    orachel New Member

    bumped if you can or see silky or battleweary around on boards. I don't want them to think I didn't answer their questions, and I seem to never be on at same time.

    THANKS FOR KEEPING BUMPED!!!!!
    rach
  6. ThinkPostive

    ThinkPostive New Member

    Bumping along
  7. orachel

    orachel New Member

    for silky!
  8. suzetal

    suzetal New Member

  9. rileyearl

    rileyearl New Member

  10. orachel

    orachel New Member

  11. orachel

    orachel New Member

    Ok...Here goes. Unfortunately, a ton of this info varies WIDELY from program to program and lender to lender. But if you find a program and you want some friendly free advice as to whether the specific terms you're being offered are good for your needs, I'd be glad to help. Until then, it kinda sucks but I can only give you ranges and averages due to WIDE variation.

    As to when start having to pay principal. Well, quite frankly...if you decided you never ever wanted to pay another cent to the principal of your home, we could totally figure out a way for you to do that. Many programs (I'd say the good majority I've used for my clients) have 10 years "interest only"...at which point, usually 1 of 2 things happens. Either the principal sum becomes due in a balloon (one giant lump payment...all you do is refi again or convert it into a new type of loan the month or 2 before your balloon pmt becomes due), or the loan simply automatically converts into a 20 year "fully amortizing" loan at the end of the first 10 years. So, in that case, you have 10 year interest only line of credit with very low rate (usually they are variable <at least 80% of the time>, but thats good for you in this case, because the "variability" of the interest rate allows the lender to offer you an insanely low "start rate" (usually 1%-3% or so). Then at the end of 10 years (if you even keep it that long) loan automatically becomes like a plain old mortgage with 20 yrs left on it. The beauty of this type of thing for a person in your situation (as you've explained it to me) is that your biggest issue is that you're totally "up in the air" about your finances for potentially the next few years. BATTLEWEARY is right proper screenname, hon...I totally get it and am going thru same thing with st dis...they should all burn in hell (not really! lol) for what they put truly ill people thru! Most are variable, which a lot of people are wary of because they don't know the specifics (though there really are a TON of crummy for the client variable rate products out there, so you're right to be cautious!. The good new is that most of those super low intro rates last 2-5 years before any adjustment happens at all. Clearly, you're looking for one who doesn't adjust for 2 years or more, cuz your "battle" might take that long. Even better...goodness forbid it takes even longer than 2-3 yrs for you to be set up properly financially (or you decide to sell the home and make chunk o' money! lol), most of these programs are protecting you the client by having "caps" on the amount they can adjust each 6 mos to a year. So, say you get one that starts at 2% interest only fixed for 3 years, then goes variable but has a 1% cap per year on amount your interest goes up....You'd actually have the first 3 yrs, plus 1,2,3...almost 4 more years on top of that before your interest rate is even as high as it is right now! And you're right, mid 5's is a good "fixed" interest rate...but just not the best product for you overall right now based on your situation.

    And just so you totally understand, I'm on disability (st...not getting paid yet though, the stinkers! lol) right now, and the company I currently work for doesn't even offer these types of loans, so nothing I'm telling you is "biased" or motivated in any way to get you as a client of mine, or make money off you in any way (in fact it would be totally illegal for me to set up your loan when I'm not licensed in your state!)...so please don't worry about that! Goodness knows, we all got enough meanies out there to deal with, so i didn't want you worried about that!!! Reason I'm saying that is if you're worried or would like me to go over specific situation with you somehow, I'd be glad to give you free advice about your specific options. I just wanna make sure you're dealing with someone reputable, overall. And if you do have someone local who you are confident will work with you in a morally upstanding way (isn't it awful that we have to look out for the shysters in the world?!lol), just make sure you read every single thing word for word before you sign. Plus, you have a 3 day period (your right to "rescind") in which to change your mind totally about the loan after you sign the closing papers, so take them to another source you're comfortable with and have them check that theres nothing in terms that might be negative for you.

    Lastly...and I know all these posts are crazy long...but it's kinda hard in writing (specially since I'm so dang foggy!) to explain in a way that I can make sure it kinda makes sense. Plus, I don't have any idea how much knowledge you have about this mortgage stuff anyway...some people know a ton about it, and some almost nothing. So, if I've "oversimplified" things here, I'm not trying to "talk down" to you in any way. Just want to make sure you know all your options and pluses and minuses of each.

    Oh, forgot prepayment penalty question...great question! Many of my clients didn't even realize they had one of these, so you're clearly a "read before you sign" person, which should make this 10x easier for you! Prepays can totally vary...I think you said yours was for 3 yrs? I cannot advise waiting till prepay expires, simply because rates are kind of at HISTORIC lows the last few years (maybe 5 or so). In my opinion, (and Alan Greenspan's which is where I got a lot of this rate info in the past!) not only are rates likely to rise in the future (though who knows when the BIG JUMP will happen) they almost HAVE to go up...our economy is at its strongest when rates are higher than they are now. Average rate (for fixed rate loan 30 yr) if you look all the way back to the Kennedy administration is about 9.7%. And that's the AVERAGE. They've been as high as 14-15% for ppl with excellent credit. So don't wait too long if you'e gonna look into this, prepay or not. All the prepay means (though it is rather unfortunate, but benefit still WAAAY outways the negative, here) is that they're (your new mtg co or broker or whatever) going to take the amount of your prepay (usually 1-3% of remaining balance of your loan) and then just add it into the new total principal of your new loan amount...along with closing costs and everything else. You won't be having to even deal with that (since you're not having to pay off the principal at all!) for approx 10 years. And all things being what they are, you're home should continue to appreciate if trends are what they've been....you'll definitely get at least the amount of the prepay extra in the sales price of your home if you wait years to sell it...and as I said in last post...could be truckloads more if theres even one good year of appreciation in the interim.

    Overall, I can't see a single negative from what I know of your situation to getting into a great interest only program. But, there are some tricky ones out there, so just be careful.

    And 2 more pieces of food for thought before my little fingers fall off from typing (lol). It is POSSIBLE, and as large as chase is as a corporation, pretty darn likely, that CHASE may have a program interest only with good terms for you. If this is the case, you're prepay won't have to even be paid. They usually don't make you pay it if you're staying with them (costs them lots of money in interest if you take your business elsewhere). And...you've mentioned possibility of moving and simplifying for a few reasons. So, if your desire to move isn't purely financial...you always have the option of doing this refi type thing we're talking about here....then renting or buying a MUCH smaller, cheaper, easier to maintain home wherever the heck you decide you want to live. You can always rent your home out with a longterm lease (and chances are, you'll even make quite a bit of money each month from the difference between your new "lower" payment, and the rent you can get from a nice california home. You may want to call a property management corporation who can tell you all about this option...could really make you a ton of extra money if your home is the type that could possibly be rented by the week or month by tourists. They pay a bloody fortune on a weekly or monthly rate. Plus, even if you're all the way across the country, property management companies make their $ by taking care of your house, handling all the details of renting it out, getting leases and credit checks on renters, screening "references" from past landlords, and even often have handyman/contractors on their payroll to fix any repairs that need done to the home for a very reasonable price. I had a client who made over 100,000 each and every year (at first i didnt' believe her, so believe me, I checked! lol) by renting two little ramshackle cabins she bought for almost nothing in an area that was pretty popular for skiing about 2-3 mos out of the year. Weekly and monthly rentals can be astounding.

    So, as always, feel free to ask away if I've confused the bejesus out of you! lol...Really, I'm pretty bored at home, and I don't want my brain to turn to total mush at home esp with fog. So I don't mind helping in any way you need...it actually makes me feel a tiny bit "useful"...which has kinda been lacking since I got sick and can't work anymore, and can't even really keep up my house very well do to my physical issues. If I can be the resident "mortgage guru" to anyone who needs this kind of help, I'm all for it. Kinda like stormyskye is the expert on whole foods, and ralph is the "go to" guy on chiropractic or holistics.....
    One thing I've learned here (and what a good lessen it is that ya'll have taught me!) is that ALL of us, no matter what our physical issues, have a ton to offer each other and the world at large.

    Hope it helps!
    Rachel
  12. Bailey-smom

    Bailey-smom New Member

    Good Luck! In South Dakota we bought our house and 40 acres of land for $32,000. Not too bad:)

    Kelly
  13. orachel

    orachel New Member

    Man, you say that you're Mortgage illiterate (most people are...seems like theres a conspiracy to keep info about financing and credit management away from the public at large! lol....never understood that! How much sense would it make to make a MANDATORY class (1 in elementary, 1 in jr high, 1 in high school) so that when people get out of basic schooling they have some of the "ammo" they need to succeed financially and (ahem!!!) therefore better the economy, overall? LOL...that's just my little dream for a contribution to society...But, we can't get funding for art or music (alas....) so not much chance of that happening!

    I'm totally slap-happy exhausted right now, as you may be able to tell...it's exactly 3am here now, and I've been trying to get to sleep (in vain!) since 10:30. If you don't mind, I'll get to your new questions sometime tomorrow aft (have doc apt, so will prob be later in aft or early in morning). As for the 1st one, and only one I can remember off hand cuz I'm so fuzzy right now...

    The term "fully amortizing" simply means that if you make all of the payments as scheduled (and with a standard fully amortizing loan it ALWAYS works to be mostly interest in payment/tiny bit of principal in first payment....every payment you make the proportions "tip" a bit to more principal...less interest. Finally, last payment should be all interest ...did any of that make sense? We're talking about a standard regular old bank type loan here...I'm guessing exactly like the one you currently have but you have 30, obviously. That is usually what you end up with after the interest only portion is done (usually 10 yrs), unless its a balloon loan. Here's what I'm thinking, tell me if this makes you uncomfortable in any way. Every time I post to you, I think of 10000 other things/details that would be useful for you to know, or details you should consider, or possible benefits or drawbacks (due to the big ole posts you keep having to read, it's probably pretty clear! lol) I know that I could explain this soooo much more clearly over the phone, and in about 1/100th the time, which just gets you all the facts you need to make an educated decision asap. I'm totally willing to pass along my number to you in chat if you'd like...we just gotta find a time we can both bop in there quick to do it. You don't have to give me yours, or even your full name obviously (I probably seem obsessed with worrying about your comfort dealing with a stranger on this...even just for advice...terrible story, but I have a few AWFUL experiences from family members and clients who've just gotten taken in like crazy by a con of some sort...and most originated on the dang net, it seems. Does amazing good (I think this group pretty much got me thru some of the darkest days of my life...no exaggeration!, but theres a lot of freaks out there, too! lol). But if you have my number (and I'm not too worried about you turning out to be a wacko...I've got a very large kitty, and she is SERIOUSLY growly!) then you can call me and we can talk just in generals without you givin me any personal details or anything. I have free long distance on my phone, so if phone bill will be an issue, we could do it with me calling you back if need be. I'm at pt right now where every little bit helps, so boy do I understand. But we'e still making it, which is a blessing in itself. Each time you ask questions, seems like more and more benefits here for you...and I keep getting really big ideas out of the blue that could potentially make your home even more of an investment in your future, even if you still do want to live there...whew. So, lemme know if you think the phone thing sounds good...It would just be a lot easier for me to advise you thoroughly and for you to understand all the details, I think. And the last think I want to do is give you this information to try to assist you, but have something I said come out wrong on paper and end up confusing you or causing you to make anything but the ideal choice for you.

    BTW...this has really been helpful to me as well!!! A, its helping my brain from totally turning to foggy mush (did I tell you I put my coffee pot in the FRIDGE this morning?! Poor husband thought I was totally off my bird!LOL), and b)...like you, I know the battle for benefits if I don't get much much healthier somehow is a long and winding road (unfortunatley seems to run straight thru gates of hell, at times!) and hubby and I have been brainstorming of ideas of how i could possibly do something from home. I need to find a way to really help people (ie: not totally nonprofit idea, but waaay cheaper than most services), and plus earn a little extra just to give us some breathing room, plus do something I enjoy and am decent at to keep my spirits up as much as possible. Know I won't be able to do much for a while, just few hours with breaks if I'm really lucky for right now...but working with you and getting my creative juices flowing again prompted hubby and I to think of 2 potential ideas!!! Really really helped, believe it or not, because we haven't thought of anything reasonable in 3 months so far!

    Rachel
    Let me know what you're most comfy with...if you want to keep on puter, Ok by me, but will take a lot longer. Plus, if we do that you have to promise me that you'll get someone local who you totally trust who is knowledgable abt finance to review anything before you sign, ok?

    Nighty night...maybe I can finally fall asleep now!
  14. silky17

    silky17 New Member

    I am not doing well tonight but wanted to let you know I recieved this post. I will read them all hopefully tomorrow. Have a bad headache again.

    Your a sweet heart for helping us.thanks,
    Debbie (silky)
  15. paige51

    paige51 New Member

    I will try to make this short and to the point. Mortgage is getting behind.will working with a credit counselor or getting a lawyer get me better results? Really need some advice.

    Mortgage is in my name alone. Can barely make ends make.

    paige51