Scottsdale Mortgage Info

You took out your Scottsdale mortgage loan a few years back when both you and your spouse were working and things were going pretty well financially. In fact, that’s the reason you bought your first home. Since then, the economy has slowed considerably and your employer has downsized. Over time – which was an almost guaranteed addition to your budget for a few years – is now a thing of the past thanks to the company’s new management. While your income has dropped considerably, your obligations continued – especially those to your Scottsdale mortgage loan institution. So, what do you do? What can you do? Let’s take a look at how an honest, proactive and direct approach with your creditors can work to your benefit when times get tough.

Worried about your Scottsdale mortgage loan?

Be honest.
Most credit counselors, financial experts and creditors say the best possible thing you can do is to contact them in writing as soon as you experience a hardship affecting your ability to pay your mortgage. You may not want to divulge your entire situation to the mortgage company – they may not want to hear that you will never be able to make another payment, for example – but in all seriousness, be open and honest about your current status.

Don’t procrastinate.
The best course of action is to take charge and let your creditors know immediately, or at least sooner rather than later. The longer you hold off doing so the worse your situation will likely become. If you procrastinate too long, the outcome can be removed from the hands of people that may be able to help and transferred to the proverbial “home office” or some other nebulous entity who thrives on red tape and double-speak. Remember this: Don’t make the erroneous assumption that you are out of options and your creditors won’t work with you. Most will, but you’ll never know until you ask them.

Do your homework.
If you’re a homeowner and have already missed a payment on your Scottsdale mortgage loan, seek assistance from your lender as soon as possible. There are laws now called the “rules restricting dual tracking.” Dual tracking is the process whereby a mortgage loan servicer (the arm of the mortgage company who’s responsible for collecting your payment and accounting for it each month) forecloses on a home while simultaneously entertaining a mortgage loan modification by the borrower. The Consumer Financial Protection Bureau (CFPB) wrote the law in 2013 to prohibit lenders from dual tracking within a 120-day period after a mortgage loan default. The rule allows greater protection for borrowers going into, or already in, the throes of foreclosure proceedings. Plus, the law has teeth – violators are subject to damages, and that may give borrowers necessary leverage for favorable consideration in a foreclosure lawsuit – if and when it that time comes.

Explore all available options.
Scottsdale mortgage loan experts say there may be programs available in some states that will make mortgage payments for homeowners. In 2010, the Hardest Hit Fund (HHF) was designed to assist borrowers struggling to make their monthly payments. The assistance was created in an effort to stave off foreclosure and return economic stability into some neighborhoods. While not available in every state, the states that do provide the HHF assistance concentrate their efforts on two groups of homeowners: Those who are unemployed and are looking for a new job, and borrowers who are “underwater” on their mortgage. These homeowners owe more on their mortgage loan than their home is worth.

Be realistic in your expectations.
As mentioned above, most creditors will try to work with you in times of hardship. However, they don’t have to. Just because you've called your mortgage lender and have been honest about your financial situation, they aren't required to provide you leniency – especially if there are extenuating circumstances such as chronic or recurring delinquencies, or other strikes against your credit report. Just remember that all you can do is ask for assistance – what the lender may or may not do is up to them. You signed a note and mortgage promising the lending institution you’d repay them each month, every month and on time.

Take the bull by the horns.
Be proactive with your financial problems – even if you think they are just temporary. By not doing anything or ignoring your situation with a creditor – especially a Scottsdale mortgage loan company – the lender may assume you don’t care about your financial responsibility or your promise to repay the money they loaned you. We’re talking about your home, here, so the last thing you want your mortgage company to think is that you don’t care about losing your home.

Since the housing crash of less than a decade ago, mortgage lenders have become more willing and able to work with borrowers who become delinquent, but it’s also a proverbial “two-way street.” The lenders should know if you need and want help, and if they aren't aware of that, they naturally assume the worst and take the necessary steps allowed them by law to recover their collateral.

The worst thing you can do.

The very worst thing you can do is to do none of the suggestions mentioned above. One of more of them can hamper or eventually cripple your chances for a successful outcome if you fall behind in your payments. By law, mortgage companies can’t and don’t wait “forever” before they begin certain procedures designed to protect the lending institution from their borrowers defaulting on their mortgage loans. Remember, most all mortgage lenders are regulated and overseen by the federal government. As such, banks and other lending institutions have policies and practices that are nearly always uniformly followed – if that bank or lending institution wants to remain in compliance with the federal guidelines. Most do, of course, because failure to do so will result in fines, penalties and – in severe cases – shutdowns or forced acquisitions. No lending institution's board of directors wants that to occur.

You can find more articles pertaining to Scottsdale mortgage loans in the Scottsdale Mortgage Info section of our site below Scottsdale Real Estate Categories in the column to your right.

We also post daily tips, many of them related to Scottsdale mortgages, on Facebook and Twitter and would love for you to follow us there, too.

If you’ve paid attention to the Scottsdale mortgage industry, no doubt you’ve seen and heard all sorts of ads for a Scottsdale reverse mortgage. Just exactly what is a reverse mortgage, you ask? A Scottsdale reverse mortgage enables a homeowner to extract the equity in his home to use as monthly income. These mortgage instruments can sometimes be attractive options for senior citizens and retirees. The reason? There are no monthly mortgage payments. As long as the homeowner continues to pay real estate taxes and home insurance – and maintains the property in good condition – the repayment of the mortgage doesn't commence until the owner dies, transfers ownership, or no longer lives in the home.

A Scottsdale reverse mortgage, however, may not be for everybody. There are other alternatives to consider – especially if you’re thinking about tapping into your home's equity to help pay living expenses during your retirement years. Let’s take a look at a few options.

A Scottsdale reverse mortgage enables a homeowner to extract the equity in his home to use as monthly income.

Refinancing your existing mortgage.

Refinancing can be a viable alternative to a reverse mortgage. With interest rates at or near all-time lows, from a pure rate standpoint you’ll likely have a much lower rate than you currently have. In addition, being able to extract cash from the equity you’ve built up in your home – especially as home values have risen in the last few years – is an excellent way to borrow cheaply. Another big advantage to refinancing versus taking out a Scottsdale reverse mortgage is you're maintaining the control of your biggest asset – and that’s important if you want to leave the property to family members or other heirs.

Just a few additional points to consider if you’re leaning toward refinancing your mortgage:  You can search online for mortgage payment calculators that will show you what your new payment will be. Plus, you can adjust the payment based on a variety of rates and terms to give you a better idea of what to expect. If you’re like most older homeowners and have owned your house for a long time, your monthly mortgage payments are comprised of a larger portion of principle and less interest. By refinancing – even at a lower interest rate – of course, you’re adding greater debt by increasing the existing loan amount by whatever equity you want to borrow. The bottom line is this, compare your payments and make sure you understand your total repayment amount. Refinancing may or may not be the best alternative and depends on a number of factors. Consult your mortgage lender, your financial advisor, or your accountant before you make the final decision.

Lastly, don’t forget the closing costs. As is the case with most refinances, you’ll have to pay closing costs that will be deducted from the equity proceeds of the new mortgage. Be sure you allow for them so you can receive the full amount you want to borrow. Your mortgage lender will give you an estimate of the closing costs you can expect to incur as part of the mortgage lending application process.

Home equity line of credit (HELOC) or a home equity loan.

Other viable alternatives to a reverse mortgage are either a HELOC or a home equity loan. In either case, compared to a reverse mortgage the fees are usually lower. Again, as with a straight refinance, choosing one of these alternatives also keeps your home under your complete control.

Let’s look at the difference between a home equity loan and a HELOC. As for the interest, the borrower pays regularly scheduled interest payments during the loan’s term. The biggest difference between the HELOC and a home equity loan comes at the end of the HELOC term. The borrower must then pay the remaining principal and interest owed – in full – either by refinancing, extending the terms of the loan or paying the loan off entirely.

A home equity loan provides you a lump sum secured by the remaining equity (or value) in your home. It requires normal regular interest payments each month. Scottsdale reverse mortgage lending experts say if you’re considering a reverse mortgage but want to leave your home to your children or other heirs, a home equity loan would be a better option.

A HELOC has been described as an “equity credit card.” It allows the homeowner to borrow up to an established credit limit during the term of the loan. The borrower repays certain portions of the principal at various times throughout the loan’s term. As the principal is reduced, your borrowing power increases (to the pre-determined limit) just like a credit card.

Flexibility is one of a HELOC’s biggest advantages, as it  can provide a source of money to be used in emergencies – only if and when you need it.

Consider downsizing.

Of course, selling your home and moving into something smaller is always an alternative to a Scottsdale reverse mortgage – especially for retirees or those approaching retirement. The biggest advantage to downsizing is you can get all the equity in your home in one lump sum as the proceeds from the closing of the sale.

Should you elect to keep your home in the family, selling it to a child or other family member is a possibility. In addition, if you can afford it and if it makes sense financially, you can even consider owner financing by having your child pay you the monthly mortgage principal and interest payments. This is especially a good option if your child or family member doesn't have any credit established or needs down payment assistance. But remember this, family or not, if you choose to take the place of a Scottsdale mortgage lender, do everything by the book. Have the required legal documentation in place with you as the mortgage holder and your family member or child as the borrower signing the note for the amount they owe. A real estate attorney can assist you in handling the preparation of the necessary documents and the closing of the sales transaction.

You can find more articles pertaining to a Scottsdale reverse mortgage in the Scottsdale Mortgage Info section of our site below Scottsdale Real Estate Categories in the column to your right.

We also post daily tips on Facebook and Twitter and would love for you to follow us there, too.

The Scottsdale mortgage refinancing market has enjoyed months of near-record low interest rates. The rates have stayed so low for so long that many borrowers assumed home mortgage interest rates will be low “forever.” And for good reason. At the first sign of rising interest rates – regardless of how slight the expected increase – the global money markets seemed to force them downward again. Even the rumblings of a Federal Reserve increase in fed funds rates did little to change the feelings of some borrowers who watched mortgage rates remain low throughout the peak home buying months.

The majority of borrowers refinanced in the past year or so while interest rates were low. Surprisingly, however, more than 10% of borrowers throughout the nation have yet to refinance. Of the ones who haven’t refinanced their mortgages, most have home loans with rates at 5% or higher. The average rate of those borrowers in the Scottsdale mortgage refinancing arena who have actually refinanced is roughly 3.5%.

Is now the best to consider Scottsdale mortgage refinancing?

For technicality’s sake, experts say almost 25% of borrowers have mortgages with rates higher than 5%, but many of those homeowners cannot refinance their loans. According to CoreLogic here are the reasons why they haven’t – or are unable to – refinance to save money. For one thing, roughly half of the existing mortgages with higher rates that haven’t been refinanced are delinquent or have experienced a delinquency during the loan period. Because of that, most lenders consider the risk of granting them a new mortgage – even at a lower interest rate – too high.

In addition, existing mortgages held as part of private-label securities portfolios are generally more difficult to refinance than government-backed loans. As a result of the changes made in the aftermath of the housing crash of nearly a decade ago, the U.S. government offered refinance programs designed to be more streamlined. Those programs included a large number of borrowers who were underwater at the time – borrowers who owed more on their homes than they were worth. Again, to be technical the resulting share of borrowers not taking advantage of the interest savings is roughly 13%. Why haven’t that 13% refinanced when they could have? Let’s take a quick look.

The reluctance of the rest of the 13% of borrowers that haven’t refinanced is likely due to the remaining balance on their higher-rate mortgages. A CoreLogic spokesperson speculated that “small balances may not be worth refinancing… the savings would be too low.” And the speculation is probably spot on. Consider this: CoreLogic found that borrowers eligible to refinance with old rates above 7% have an average remaining mortgage balance of only $53,000. Borrowers with rates between 5%-7% had roughly $100,000 remaining on their principal balance. With the closing costs involved in a refinance – even with an existing lender – the question those borrowers need to ask themselves is, “Would refinancing a relatively low balance save me any money?” Closing costs for a refinance can often run 2%-3% of the loan amount, depending on whether points are involved. Let’s take a look and see if the savings are worth the effort.

The quick answer is, it depends on the original mortgage amount. For example, a borrower with an original loan balance of $400,000 can reduce his monthly mortgage payment substantially since the original payment was much higher. If that borrower is refinancing a $100,000 remaining balance, the closing costs are going to be comparatively lower. Conversely, a borrower with an original loan amount of $150,000 who currently owes $75,000 won't enjoy a significant savings on the remaining amount of interest – especially after factoring in the closing costs. In addition, many borrowers simply don't like the idea of extending the term of their loan. A borrower who’s 12 years into an original 15-year mortgage may just want to pay it off as planned instead of recasting the loan term to another 15-year term by refinancing.

As usual, each case is different, so it’s a good idea to talk to a Scottsdale mortgage refinancing professional. Here’s why:

Your mortgage lender can provide you with the remaining balance on your existing mortgage at the original interest rate. In turn, using the original amortization schedule – updated to reflect any principal only payments – the lender can estimate the amount of interest you’ll pay over the remaining life of the loan. Naturally, the calculation is based on the assumption that you won’t pay off or otherwise alter the loan's principle balance. Then, using current interest rates, the lender will determine what a typical refinance will cost in terms of monthly payment versus your existing mortgage payment. The interest portion of the payment when amortized over the new term will give the lender the total amount of interest you’d pay if you refinanced – again, barring any future changes to the principal amount. By simply comparing those two amounts, the lender can determine the interest cost savings. However, that’s not the end of the analysis. As mentioned, the costs of closing the loan have to be figured into the equation to determine the net savings, if any.

Closing costs, though not as high as on a new loan origination to purchase a home, can still be substantial. Though it may seem unnecessary, the lender is required to ensure the home's value is sufficient for the loan amount to be granted. Therefore, either a new appraisal (or, in some cases, an update to the existing appraisal) is required. In addition, you can expect to pay a loan origination fee and an updated title search fee. A new credit report and normal court recording costs will also be required. You may have to pay for an updated termite inspection and a home inspection. After all those costs are taken into consideration, then and only then can your Scottsdale mortgage refinancing lender give you an estimate on the cost savings to refinance and an opinion as to whether it makes financial sense. From there, only you can make the decision.

You can find more articles pertaining to Scottsdale mortgage refinancing and the overall mortgage market in the Scottsdale Mortgage Info section of our site below Scottsdale Real Estate Categories in the column to your right.

We also post daily tips, many of them related to Scottsdale mortgages, on Facebook and Twitter and would love for you to follow us there, too.

Interest rates recently rose slightly, raising the question of what affect they will have on Scottsdale mortgages. Rates increased for the first time in more than two months, creating a sell-off in the U.S. Treasury bond market. Mortgage interest rates have traditionally been tied loosely to the 10-year Treasury bond yield. While the increase in interest rates was only .125% (1/8th of a percentage point) the uptick was enough to adversely affect stocks in the nation’s homebuilding industry.

Despite the impact the interest rate increase had on Wall Street, its relationship to Scottsdale mortgages is expected to be minimal. Let’s take a look at the various forms the rate rise will likely have throughout the nation. Historically, a slight uptick in interest rates – if anything – has signaled the end of rate drops, causing prospective home purchasers to finally make a move to buy before rates go even higher. When rates are low and could be expected by some to inch even lower, potential homebuyers often wait in the wings for rates to get even better before they decide to buy.

A mortgage industry spokesperson said that when rates move upward – even the slightest amount upward – there is always room for concern. He called the interest rate increase “a serious threat to low, stable mortgage rates until proven otherwise.” Mortgage interest rates have been at near-record lows for most of the summer, so it’s likely that a movement upward has raised more than a few industry eyebrows – especially among those in the business of making Scottsdale mortgages.

Regardless of the amount of the increase, the simple truth is that higher mortgage rates add to the already-expensive cost of home buying. As mentioned, the rate rise could push some homebuyers into action as they scramble to buy before their costs rise. In addition, higher interest rates may startle some sellers into cutting their asking prices in an effort to offset the news. It’s one of the few ways sellers can combat the chance of losing interested buyers.

What it means for homeowners with existing Scottsdale mortgages is this:

Homeowners with Scottsdale mortgages should seriously consider whether now is the right time to refinance.

It may finally be the time to refinance. Despite interest rates being low for months, experts say there are hundreds of thousands of borrowers who have procrastinated or otherwise not refinanced.

If the Federal Reserve decides to raise its funds rate at their next meeting, mortgage rates still may not move much higher. Remember, when the Fed made its first increase last December, mortgage interest rates only increased slightly and then leveled off just as quickly. Industry insiders familiar with Scottsdale mortgages say the longer-term rates such as 10-year U.S. Treasury yields and mortgage interest rates do tend to move with expectations of Federal Reserve rate increases – not the Fed’s actual decision to hike rates. The experts use December 2015 as their most notable example. The Fed increased their rate slightly and mortgage rates dropped. Why? Because the market had spent much of the preceding period in anticipation of a rate hike by the Federal Reserve. In this scenario, the threat or expectation of an interest rate increase caused less concern than when the actual increase occurred. Therefore, the market adapted ahead of time to whatever interest rate changes were headed its way.

Let’s assume rates on Scottsdale mortgages rise slightly in the expectation of a Fed rate increase. Historically, there has been a remote chance that mortgage rates would move a full point upward. Need more reassurance? Mortgage rates have only increased by .5% (or half a percentage point) 14 times in the past 45 years, according to a report issued by John Burns Real Estate Consulting. The firm further predicts rates will stay below 4% through 2018. Burns had this to say about the effects that interest rate increases on Scottsdale mortgages will have on various segments of housing. “Historically, they have hammered builder stocks, hurt new home sales bad, hurt existing home sales a little, and had very little impact on home prices unless there was a recession too," noted Burns. "My conclusion is that investors are right to punish the stocks, but often punish them too hard.”

In addition, most experts say that even if rates were to make another move upward, the housing market has bigger issues to worry about. Supply is still a major consideration, and the lack of homes for sale continues to move home prices higher and higher, adversely affecting affordability for most Americans – a problem that is more severe than slightly higher mortgage interest rates. While homebuilders work hard to increase production, they are doing so in the face of rising costs for developable land and higher labor costs. Plus, intrusive construction regulations and restrictions have made homebuilding more challenging than ever.

In conclusion, nobody likes to see interest rate increases – especially among Scottsdale mortgages – but the resulting impact will probably only hurt the housing industry minimally, at best. Interest rates have been very low for a long time, and there’s little reason to think that increases – even if they do occur – will be large enough to make a difference in the housing market. The additional principal and interest payment that even a 1% increase would have is less likely to prevent buyers from staying put in their existing homes or for renters to continue to pay rent at ever-increasing rates. Simply put, as is the case with many movements in the marketplace – interest rates among them – the effects vary from situation to situation and market to market. Furthermore, for purchasers who have their eye on moving out or moving up, home prices are far more likely to get their attention than small increases in rates affecting Scottsdale mortgages.

You can find more articles pertaining to Scottsdale mortgages and the overall mortgage market in the Scottsdale Mortgage Info section of our site below Scottsdale Real Estate Categories in the column to your right.

We also post tips daily tips, many of them related to Scottsdale mortgages, on Facebook and Twitter and would love for you to follow us there as well.

Technology and the digital age has certainly made an impact on the Scottsdale mortgage business. While roughly 90% of prospective homeowners search online for a home, less than 10% of mortgage lenders offer a comprehensive digital mortgage experience.  Now, mortgage lenders are starting to enter the 21st Century by gradually reinventing the mortgage process. Here are some ways in which important improvements are occurring.

Scottsdale Mortgage Business – Ushering in Technology

Some mortgage lenders still subject their prospective borrowers to the golden age of copiers, scanners and faxes to assemble and deliver loan application information and financial paperwork. And while the Scottsdale mortgage business has largely been overlooked when it comes to technological advances, it does appear that is changing. Here are the top five ways technology is changing the home mortgage lending process for lending institutions and borrowers.

The Scottsdale mortgage business is slowing adapting to technology as a part of the mortgage process.

A better borrower experience.The mortgage lending process from application to closing is, by its very nature, information driven. Some loan files can exceed 500 pages. In an effort to save time, much of the information required by lenders in the Scottsdale mortgage business is available digitally, and applicants can provided bank account information, tax forms and pay stubs online. This not only streamlines the application process for homebuyers, but it also makes the collection and verification steps easier for the lending institution. Since the financial data is independently verified from its source, mortgage lenders are able to more readily confirm that the information is accurate and current, thus saving time in their review and analysis.

In addition, some financial technology companies are offering mobile experiences for prospective borrowers. The mobile apps give the borrowers unique access to the mortgage lending process. The accessibility enables borrowers to stay on top of their documentation needs and requirements, ultimately giving them a better, more satisfying user experience.

Increased transparency. Since applicants don’t have access to their mortgage lenders’ internal systems, they rarely know where they stand during the loan application process. They are then forced to rely on the loan officers to communicate various requirements or updates via phone or email. Some innovative Scottsdale mortgage lenders are now providing information portals for prospective borrowers to be able to see the same information the loan officers do. This improvement in transparency allows borrowers to obtain a complete list of required documentation ahead of time – and to know where they stand with respect to any additional information required. This innovation enables both parties to work together for the common goal of assembling the information in order to get the loan approved and closed in a timely manner.

Making the mortgage process painless. A normal turnaround time for a borrower to receive an underwritten loan approval from a mortgage lender is about 18 days. Overall, it could take roughly 50 days to complete the loan process. Comparatively speaking, in a totally digital world where online shoppers can order an item and get it overnight, 50 days seems like forever.

Technology is helping introduce the mortgage lending process to the modern world. Using a workable combination of intuitive design and direct connectivity, loan applicants are now able to contribute to the process and receive up-to-date assistance from the lending institutions. This makes the borrowers more in control of their own destiny, as well as participating in more of a “team approach” to getting their loan approved.

Digital compliance. Following the housing crash of less than a decade ago, federal regulations required lenders to follow certain lending practices and give their borrowers more disclosure information early in the mortgage loan process. The regulations are designed to allow mortgage lenders to adhere to strict guidelines while limiting negative impact on the borrower experience.

New developments in technology have enabled lenders to automatically send the production and delivery of electronic disclosure information at certain points in time during the mortgage application process. In addition, the natural creation of a digital “paper trail” for audibility and accountability is an offshoot of the new technology.

Money-saving advantages. It’s estimated that it costs around $8,000 for a lender to complete a mortgage from start to finish. Much of that cost is for employees to perform routine, manual tasks such as translating required documentation into email form, as well as the physical tracking of various items on paper documents and forms. In turn, such work inefficiencies are passed through to the borrowers by way of higher fees and other processing or closing costs. Using modern technology can automate manual work and reduce these costs. In addition, lenders are able to increase their efficiency and productivity – passing the cost savings on to their customers.

The advent of workable technological advances in the Scottsdale mortgage business creates faster and more simplified lending interactions. Best of all, the digital “revolution” will likely continue to impact the mortgage industry and improve the borrower experience. While mortgage lending will probably never be a “one-click” process, it can continue to be better, faster and less costly. When you stop and think about it, the digital world has basically spoiled us all. We want – and often expect – goods and services almost immediately. From the digital delivery to a movie or television program on demand, to the ease of online banking, our society has come to expect speed and convenience. It’s only natural that we’d expect the same speed and delivery of improvements in the Scottsdale mortgage business. In addition, mortgage lenders want it, too. That’s why we will continue to anticipate and expect further advances that will make the home buying and home financing process a better experience for all parties involved.

You can find more articles pertaining to the Scottsdale mortgage business in the Scottsdale Mortgage Info section of our site below Scottsdale Real Estate Categories in the column to your right.

We also post tips daily tips, many of them related to the Scottsdale mortgage business, on Facebook and Twitter and would love for you to follow us there as well.