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Average Life of a Mortgage
Most buyers when they get their first mortgage they have the mindset of having the mortgage for the next 30 years. Its important especially because of the amount you are borrowering to consider the real life of how long you will be borrower this money for.
There are many ways to pay off a mortgage. You can sell the home and you can refinance the home. The chances of you selling the home or refinancing with in 5-7 years of getting your mortgage is about 95%. Yes. This is a real statistic. Less than 5% of americans keep their mortgage longer than 7 years. This becomes important when you start looking at the cost of a mortgage when you pick your lender.
If you know you will only have a mortgage for 2-3 years then it would be better to do a NO COST loan and pay a higher interest rate for those 2 years. Closing costs only make since when you know you will have this mortgage for at least the next 5 years. The numbers are different based on the amount you finance.
If you have more questions please message me below. I am happy to answer them ASAP.
Cash Out Refinance
If you are wanting to take more than $2,000 out of the equity of your home this is considered a cash out refinacne. The bank will allow you to go up to 80-85% of the value of the home. The VA loan allows you to take up to 100% of the value of the home for a cash out refinance. There are lots of reason to utilize your equity for a cash out refinancne. You can use this money to consolidate debt, do home improvements, purchase other property etc.
If you have questions about a cash out refinacne message me below. I am happy to answer your question asap.
Chapter 13 Bankruptcy & 2nd Mortgage
Did you know that a Chapter 13 bankruptcy can wipe away a 2dn mortgage.
Yes. Thats correct. There are 2 different types of personal bankruptcies.
The first is a Chapter 7 BK. In a chapter 7 BK the debt that is included is completely wiped out. There are a few debts that can NOT be included in Chapter 7. Its important to know that Student Loan debt is not allowed to be included in a chapter 7 bk.
The 2nd type of bankruptcy is the Chapter 13 BK. This option is for those that do NOT qualify for the chapter 7. The chapter 7 bk has income limits on how much money you make in a year. The Chapter 13 bk does not have an income limit.
However, the Chapter 13 bk is a debt restruction. The trustee will negotiate the debt and creat a monthly payment plan that will pay off the debt in a set amount of time. This is normally 5 years. There can be no more interest accrewing on the liabilities. The payments will settle the debt once all payments have been made. With a Chapter 13 the bank allows someone to purchase after 12 months of the filing date. The buyer will need to get the trustee's approval and have at least 12 months of on time payments made. The chapter 7 bk has a longer waiting period of 2-4 years depending on the loan type.
If you have more questions please message me below. I am happy to asnwer you questionsn ASAP. Peter J. Metz The Mortgage Genius.