FHA loans. FHA loans are a program from the Department of Housing and Urban Development (HUD). They’re designed to help first-time homebuyers and people with low incomes or little savings afford a home. They typically offer lower down payments, lower closing costs and less-stringent financial requirements than conventional mortgages. The drawback of FHA loans is that they require an upfront mortgage insurance fee and monthly mortgage insurance payments for all buyers, regardless of your down payment. And, unlike conventional loans, the mortgage insurance cannot be canceled, even if you have more than 20 percent equity in your home.
Technology has revolutionized the mortgage selection process, making rate comparisons a quick and easy first step. That said, it’s important to look beyond the initial rates and dig deeper into loan terms (the fine print), such as closing costs, hidden fees and down payment requirements. Some lenders will claim to charge “no origination fee,” but their online quote includes a hefty 2% “discount point” in the fine print. Another great resource when evaluating lenders is to read online reviews on Google, Yelp, Zillow or Facebook.
In addition to the loan modification programs mentioned above, Wells Fargo has other options and programs that struggling homeowners can use to get help with paying their mortgage. Examples include principal reduction and forbearance. For example, they have written off tens of billions of dollars in principal that is due from a homeowner. Find additional Wells Fargo mortgage assistance programs.

*The funds available to the borrower may be restricted for the first 12 months after loan closing, due to HECM reverse mortgage requirements.  In addition, the borrower may need to set aside additional funds from the loan proceeds to pay for taxes and insurance. Information accurate as of 10/1/2017. Update underway to reflect latest changes to PLFs by HUD

The mortgage industry works a little differently in the US than it does in many other parts of the world. Mortgage loans are treated as commercial paper, which means that lenders can convey and assign them freely. That results in a situation where financial institutions bundle mortgage loans into securities that people can invest in. The purpose of this system is to quickly free up money for the financial institutions to lend out in the form of new mortgages. The US also has a number of government-sponsored enterprises, such as Freddie Mac and Fannie Mae, that exist to facilitate this system. Most mortgages have fixed rates, which is also a departure from the variable rates that are commonly found in Europe and elsewhere.


It’s not uncommon for lenders to pull your credit report a second time to see if anything has changed before your loan closes. Be careful not to do anything that would bring down your credit score while your loan is being processed. So, pay all of your bills on time, don’t apply for any new credit cards, and don’t take out any new car loans until your home loan has closed.
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Buying a home is the embodiment of the American dream. However, that wasn’t always the case: In fact, before the 1930s, only four in 10 American families owned their own home. That’s because very few people had enough cash to buy a home in one lump sum. And until the 1930s, there was no such thing as a bank loan specifically designed to purchase a home, something we now know as a mortgage.
Mortgage Payment Assistance (MPA) offers up to 24 months of assistance for eligible applicants who have had an unemployment or underemployment hardship in the last 36 months and need help paying mortgage monthly. Of the 24 months, up to 12 months may be used to reinstate first and some second mortgages. Mortgage payment assistance ends when the homeowner is able to sustain the mortgage payment, when reserved funds are exhausted, or when 24 monthly payments have been provided, whichever comes first. Under MPA, you may be required to make partial payments toward your mortgage during your participation in the program. If you are now employed and are able to make your currently monthly payments but are behind on your mortgage, MPA offers a onetime payment to your lender for up to 12 months of mortgage help to bring your mortgage current.
As you’re comparing quotes, ask whether any of the lenders would allow you to buy discount points, which means you’d prepay interest up front to secure a lower interest rate on your loan. How long you plan to stay in the home and whether you have money on-hand to purchase the points are two key factors in determining whether buying points makes sense. You can use this calculator to decide whether it makes sense to buy points.

Mortgages and home equity loans are two different types of loans you can take out on your home. A first mortgage is the original loan that you take out to purchase your home. You may choose to take out a second mortgage in order to cover a part of buying your home or refinance to cash out some of the equity of your home. It is important to understand the differences between a mortgage and a home equity loan before you decide which loan you should use. In the past both types of loans had the same tax benefit, however the 2018 tax law no longer allows homeowners to deduct interest paid on HELOCs or home equity loans unless the debt is obtained to build or substantially improve the homeowner's dwelling. Interest on up to $100,000 of debt which substantially improves the dwelling is tax deductible. First mortgages and mortgage refinance loans remain tax deductible up to a limit of $750,000.
All mortgages are not created equal. Even if loans have the same interest rate, there could be differences in the points and fees that make one offer more expensive than another. It’s important to understand all of the components that go into determining the price of your mortgage, so you can accurately compare the offers being made. You can click here for a good explanation of the components of mortgage pricing.
Whether it is purchasing your first home, buying a vacation home or downsizing to something more appropriate to fit your life style, a new beginning can be a wonderful experience. It can also be a bit overwhelming. There are open houses to attend, homes to compare and a sea of information to sort through.  During these times, having a team around you is extremely important. One of the most important members of that team is your loan officer (and mortgage company)
Home ownership is just not a realistic option for everyone right now, despite what may look like once-in-lifetime mortgage rates. If you fall into this category, don’t despair. Your financial circumstances could change, the economy is still very much in flux, and remember that the current mortgage crisis involved a lot of home buyers getting in over their heads. When it comes to a major purchase like a home, timing is critical.
National policy favors homebuyers via the tax code (although less than it previously did). For many families the right home purchase is the best way to build an asset for their retirement nest egg. Also, if you can refrain from cash-out refinancing, the home you buy at age 30 with a 30-year fixed rate mortgage will be fully paid off by the time you reach normal retirement age, giving you a low-cost place to live when your earnings taper off.
Treasury/FHA Second Lien Program (FHA2LP): If you have a second mortgage and the mortgage servicer of your first mortgage agrees to participate in FHA Short Refinance, you may qualify to have your second mortgage on the same home reduced or eliminated through FHA2LP. If the servicer of your second mortgage agrees to participate, the total amount of your mortgage debt after the refinance cannot exceed 115% of your home’s current value.
National policy favors homebuyers via the tax code (although less than it previously did). For many families the right home purchase is the best way to build an asset for their retirement nest egg. Also, if you can refrain from cash-out refinancing, the home you buy at age 30 with a 30-year fixed rate mortgage will be fully paid off by the time you reach normal retirement age, giving you a low-cost place to live when your earnings taper off.
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If you are experiencing difficulties making your mortgage payments, you are encouraged to contact your lender or loan servicer directly to inquire about foreclosure prevention options that are available. If you are experiencing difficulty communicating with your mortgage lender or servicer about your need for mortgage relief, there are organizations that can help by contacting lenders and servicers on your behalf.
So one thing that makes a mortgage different from other types of loans is that it is backed up by something – in this case, your home. They call this a “collateralized loan.” Credit cards are also loans, but they aren’t backed up by anything. If you fail to make your credit card payments, the credit card companies can’t take your home away from you.
When your application is received and your eligibility is confirmed, the NC Housing Finance Agency may place a temporary stay-of-foreclosure for up to 120 days so that the company that owns your mortgage cannot foreclose on your home or take other legal action while your Mortgage Payment Program loan application is under review. If you qualify for the loan, the NC Housing Finance Agency will make your mortgage payment directly to your loan provider or bank. At the end of the assistance period, you will resume making your mortgage payment.

Many homeowners pay their mortgages on time, but are not able to refinance to take advantage of today’s lower mortgage rates, mainly due to a significant decrease in the value of their home. A Home Affordable Refinance will help borrowers refinance their first mortgage even if the balance owed is more than 100% of the home value. For example, let’s say the amount you owe on your first mortgage is $500,000. You may be able to refinance even if the home value is now only $400,000.
Amortization is what you are actually paying per year against your loan. You can get a mortgage with a term of 10, 15 or 30 years. You pay each month and the principal decreases until it’s paid off. The payments don’t change but at the beginning of the term, most of the payment is going toward interest. By the end of the term, that’s flipped and you’ll be paying down the mortgage principal.
Insurance: This will be paid to a homeowner’s insurance company of your choice; this is required when you have a mortgage. Lenders require that your insurance cover the cost of rebuilding the home if it is ruined by fire or other disaster. This “replacement cost” is determined by your insurer, and must be agreed to by your lender. Insurance will typically cost $700 to $1,200 per year for a single family home.

Include PITI (principal, interest, taxes and insurance) in your budget. Mortgage calculators will show you how much you'll pay toward principal and interest every month. Remember that you'll also have to pay property taxes and homeowners insurance. Some financial institutions will require you to contribute these funds monthly along with your principal and interest payment. Be sure to talk to your lender to understand what will be included in your monthly payment.
Remember that whenever you apply for a loan, including a mortgage, the “hard inquiry” the lenders make shows up on your credit report and temporarily lowers your score. Applying for several mortgages in a two week period only counts as one inquiry, but if you drag it out and canvas as many lenders over a longer period, you’ll end up doing damage to your score, which could result in a lower rate than you were hoping for.

A lender offers you a mortgage interest rate based upon a number of factors, but by far the most important is the secondary market for mortgages. Banks typically sell their mortgages to aggregators like Fannie Mae and Freddie Mac, which are government-sponsored enterprises that buy and repackage mortgages. Aggregators issue mortgage-backed bonds to investors in the secondary market. The daily fluctuations of supply and demand affect the interest rates investors require to buy these bonds. As the economy strengthens, investors require a higher interest rate on bonds because of growing competition for their investment dollars. Banks peg their mortgage interest rates to the daily interest rate on mortgage-backed bonds in the secondary market.
Several utility companies are part of this organization and participate in the program. Grants are available for needy families and individuals and they can provide assistance with a wide variety of needs. For example, prescription medications, eyeglasses, artificial limbs, medical care and bills, wheelchairs, ramps or other handicap renovations are examples of the grants awarded each month. However, please note that no utility bills are paid through this program. Call your utility company and ask about Operation Round Up.
A commission-based mortgage lender will primarily be motivated by closing your mortgage, whether or not the terms of the mortgage are in your best interest. With salary-based mortgage consultants, you won’t have to worry that your mortgage lender is locking you into a huge financial commitment in order to make their own mortgage payment for the month. Interest rates change daily and vary based on your financial situation. So, you want to be sure your loan officer or consultant takes the time to get you to know your current finances, as well as your outlook and goals.

If you are thinking about buying a home in the near future, before you start house hunting or get pre-approved for a loan, it’s a good idea to check your credit report and find out what your credit score is. You are entitled to a free credit report once a year from each of the three credit bureaus – Equifax, TransUnion, and Experian, which you can access at www.annualcreditreport.com.
When the fixed rate period ends, you’ll usually be automatically transferred onto your lender’s standard variable rate, which will typically be higher than any special deal you’ve been on. At this point you’ll see your interest payments increase. However, you will be free to remortgage to a new mortgage deal, which may help keep your payments down.
Citigroup will be providing mortgage help to millions of homeowners. They are committed to stopping foreclosures and in helping homeowners stay in their homes. Billions of dollars in fees and principal reduction will be provided to qualified borrowers. They will also provide additional mortgage assistance to the unemployed and those who have had a reduction in their income. Read more on the Citi unemployed homeowner mortgage assistance.
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