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  • Going Bill Crazy, now Loan Crazy!

    Here are three loans that a borrower is thinking of doing to
    consolidate debt. The borrowers home is worth 380,000 on a loan
    balance of 172,000. The borrowers credit score is 507. The borrower
    has net take home pay of 3987.06 a month. The gross take home is
    6057.00 a month. The borrower is currently 60 days on his first
    mortgage and 60 days on his 2nd mortgage and 60 days on his car note.
    The borrower wants to use some of the equity in his home to
    consolidate the 1st, 2nd, car and about 17,000.00 of collections and
    charge offs that are on his credit report. All these ad up to about
    270,000.00 for a loan. The arms are all on a six month libor and have
    about a 6% life cap and a 3% adjust after the fix term and then 1% per
    term to cap.



    Which loan is best for the borrower?

    Should the borrower just combine the 1st and 2nd in a fixed and try to
    pay the other collections accounts? (Borrower has been behind for over
    2 years)

    Should the borrower try to do the whole thing in a fixed loan, and can
    he get a rate to support his pay?

    Should the borrower just continue on as is and try to raise his credit
    score to get a better rate?

    Many of the loans available to the borrower are borderline predatory,
    should the borrower try to negotiate for a better deal with creditors
    and collections folks?



    Here are some of the fees and cost associated with the borrowers
    delimma. Please help the borrower by giving your professional insight.
    If you are a mortgage lender that would be even better.

    Option One Seabreeze Ameriquest

    Type Loan 2/28 7.450% Arm 2/28 8.00% Arm 3/1 9.6% Arm
    Loan Amount $246,000.00 $251,000.00 $260,400.00

    Loan Origination Fee $7,530.00 $0.00
    Loan Discount Fee $8,799.65
    Appraisal Fee $350.00 $375.00 $275.00
    Credit Report Fee $0.00
    Broker Fee $10,416.00
    Processing Fee $595.00 $626.00
    Application Fee $500.00 $200.00 $360.00
    Underwriting Fee $595.00
    Tax Service Fee $70.00 $70.00
    Flood Search Fee $16.00
    Courier $25.00 $46.00
    Admin Fee $400.00 $239.00
    Funding Fee $50.00
    Closing/Settlement Fee $500.00 $550.00
    Title Insurance Fees $1,536.36 $800.00
    Demand /Benificiary Fee $100.00
    Interest for # of days $1,670.59 $278.89 $644.90
    Hazard Insurance Premium $911.40
    Notary Fee $25.00 $150.00
    Recording Fee
    Escrow Fee $298.00

    Totals $16,129.35 $10,698.89 $12,174.55

    Monthly P&I 1811.85 2079.56 1841.75

    pre-pay yes yes yes
    assign no no no

  • #2
    Going Bill Crazy, now Loan Crazy!

    Dennis" <[email protected]> wrote in message
    news:[email protected] om...
    Here are three loans that a borrower is thinking of doing to consolidate debt. The borrowers home is worth 380,000 on a loan balance of 172,000. The borrowers credit score is 507. The borrower has net take home pay of 3987.06 a month. The gross take home is 6057.00 a month. The borrower is currently 60 days on his first mortgage and 60 days on his 2nd mortgage and 60 days on his car note. The borrower wants to use some of the equity in his home to consolidate the 1st, 2nd, car and about 17,000.00 of collections and charge offs that are on his credit report. All these ad up to about 270,000.00 for a loan. The arms are all on a six month libor and have about a 6% life cap and a 3% adjust after the fix term and then 1% per term to cap. Which loan is best for the borrower? Should the borrower just combine the 1st and 2nd in a fixed and try to pay the other collections accounts? (Borrower has been behind for over 2 years) Should the borrower try to do the whole thing in a fixed loan, and can he get a rate to support his pay? Should the borrower just continue on as is and try to raise his credit score to get a better rate? Many of the loans available to the borrower are borderline predatory, should the borrower try to negotiate for a better deal with creditors and collections folks? Here are some of the fees and cost associated with the borrowers delimma. Please help the borrower by giving your professional insight. If you are a mortgage lender that would be even better. Option One Seabreeze Ameriquest Type Loan 2/28 7.450% Arm 2/28 8.00% Arm 3/1 9.6% Arm Loan Amount $246,000.00 $251,000.00 $260,400.00 Loan Origination Fee $7,530.00 $0.00 Loan Discount Fee $8,799.65 Appraisal Fee $350.00 $375.00 $275.00 Credit Report Fee $0.00 Broker Fee $10,416.00 Processing Fee $595.00 $626.00 Application Fee $500.00 $200.00 $360.00 Underwriting Fee $595.00 Tax Service Fee $70.00 $70.00 Flood Search Fee $16.00 Courier $25.00 $46.00 Admin Fee $400.00 $239.00 Funding Fee $50.00 Closing/Settlement Fee $500.00 $550.00 Title Insurance Fees $1,536.36 $800.00 Demand /Benificiary Fee $100.00 Interest for # of days $1,670.59 $278.89 $644.90 Hazard Insurance Premium $911.40 Notary Fee $25.00 $150.00 Recording Fee Escrow Fee $298.00 Totals $16,129.35 $10,698.89 $12,174.55 Monthly P&I 1811.85 2079.56 1841.75 pre-pay yes yes yes assign no no no
    In today's market, I would vote for a fixed rate mortgage, not an ARM.

    The other option is to sell your house, pay everything off, rent a very
    small place for awhile, and focus on saving money and getting your credit
    back to A-1 perfect.


    Comment


    • #3
      Going Bill Crazy, now Loan Crazy!

      If this borrower is already looking for a loan at AMERIQUEST then this means
      all of his options for
      non-shark lenders have been exhausted. I do not know which part of the
      country this property is located
      in. The prospect borrower may want to see how well property values are
      appreciating in his neighborhood and
      it's prospects thereof. Why should he/she pay a huge amount to refinance;
      closing costs + high interest rate + 2 or
      3 year prepayment penalty for a property that may not be appreciating at a
      rate to offset these costs. The money
      he/she is paying to refinance should equate to a return on this expenditure
      at a reasonable point in time in the future,
      otherwise why refinance. If the appreciation of property does not appear to
      be in the cards (no one has a crystal ball I know),
      I would opt to sell. After the 1st & 2nd mortgage is payed off then DO NOT
      PAY OFF ALL OF THE BILLS AT ONE-TIME.
      Reason being is that the accounts in which he/she is behind need to be left
      open in order to REBUILD A GOOD CREDIT HISTORY;
      CAN ONLY HAPPEN BY PAYING THEM TIMELY & GRADUALLY. I was in the same
      predictament at one time in my life.
      I paid off all of my bills I had been late on and then had no actitivity on
      these accounts since I had paid them off. It took longer to
      establish my credit then if I had gradually started to pay passed due and
      kept paying for the next year or two timely to bring my rating
      back. Hope this helps.

      Erich


      "RacerT" <[email protected]> wrote in message
      news:[email protected]
      Dennis" <[email protected]> wrote in message news:[email protected] om...
      Here are three loans that a borrower is thinking of doing to consolidate debt. The borrowers home is worth 380,000 on a loan balance of 172,000. The borrowers credit score is 507. The borrower has net take home pay of 3987.06 a month. The gross take home is 6057.00 a month. The borrower is currently 60 days on his first mortgage and 60 days on his 2nd mortgage and 60 days on his car note. The borrower wants to use some of the equity in his home to consolidate the 1st, 2nd, car and about 17,000.00 of collections and charge offs that are on his credit report. All these ad up to about 270,000.00 for a loan. The arms are all on a six month libor and have about a 6% life cap and a 3% adjust after the fix term and then 1% per term to cap. Which loan is best for the borrower? Should the borrower just combine the 1st and 2nd in a fixed and try to pay the other collections accounts? (Borrower has been behind for over 2 years) Should the borrower try to do the whole thing in a fixed loan, and can he get a rate to support his pay? Should the borrower just continue on as is and try to raise his credit score to get a better rate? Many of the loans available to the borrower are borderline predatory, should the borrower try to negotiate for a better deal with creditors and collections folks? Here are some of the fees and cost associated with the borrowers delimma. Please help the borrower by giving your professional insight. If you are a mortgage lender that would be even better. Option One Seabreeze Ameriquest Type Loan 2/28 7.450% Arm 2/28 8.00% Arm 3/1 9.6% Arm Loan Amount $246,000.00 $251,000.00 $260,400.00 Loan Origination Fee $7,530.00 $0.00 Loan Discount Fee $8,799.65 Appraisal Fee $350.00 $375.00 $275.00 Credit Report Fee $0.00 Broker Fee $10,416.00 Processing Fee $595.00 $626.00 Application Fee $500.00 $200.00 $360.00 Underwriting Fee $595.00 Tax Service Fee $70.00 $70.00 Flood Search Fee $16.00 Courier $25.00 $46.00 Admin Fee $400.00 $239.00 Funding Fee $50.00 Closing/Settlement Fee $500.00 $550.00 Title Insurance Fees $1,536.36 $800.00 Demand /Benificiary Fee $100.00 Interest for # of days $1,670.59 $278.89 $644.90 Hazard Insurance Premium $911.40 Notary Fee $25.00 $150.00 Recording Fee Escrow Fee $298.00 Totals $16,129.35 $10,698.89 $12,174.55 Monthly P&I 1811.85 2079.56 1841.75 pre-pay yes yes yes assign no no no
      In today's market, I would vote for a fixed rate mortgage, not an ARM. The other option is to sell your house, pay everything off, rent a very small place for awhile, and focus on saving money and getting your credit back to A-1 perfect.

      Comment


      • #4
        Going Bill Crazy, now Loan Crazy!

        Good advice.

        "EaDesigns" <[email protected]> wrote in message
        news:[email protected]
        If this borrower is already looking for a loan at AMERIQUEST then this
        means
        all of his options for non-shark lenders have been exhausted. I do not know which part of the country this property is located in. The prospect borrower may want to see how well property values are appreciating in his neighborhood and it's prospects thereof. Why should he/she pay a huge amount to refinance; closing costs + high interest rate + 2 or 3 year prepayment penalty for a property that may not be appreciating at a rate to offset these costs. The money he/she is paying to refinance should equate to a return on this
        expenditure
        at a reasonable point in time in the future, otherwise why refinance. If the appreciation of property does not appear
        to
        be in the cards (no one has a crystal ball I know), I would opt to sell. After the 1st & 2nd mortgage is payed off then DO NOT PAY OFF ALL OF THE BILLS AT ONE-TIME. Reason being is that the accounts in which he/she is behind need to be
        left
        open in order to REBUILD A GOOD CREDIT HISTORY; CAN ONLY HAPPEN BY PAYING THEM TIMELY & GRADUALLY. I was in the same predictament at one time in my life. I paid off all of my bills I had been late on and then had no actitivity
        on
        these accounts since I had paid them off. It took longer to establish my credit then if I had gradually started to pay passed due and kept paying for the next year or two timely to bring my rating back. Hope this helps. Erich

        Comment


        • #5
          Going Bill Crazy, now Loan Crazy!


          "RacerT" <[email protected]> wrote in message
          news:[email protected]
          Many of the loans available to the borrower are borderline predatory, should the borrower try to negotiate for a better deal with creditors and collections folks?

          The 507 Credit Score is going to play a huge part in the ability to get a
          loan, or not get one. It will be the deciding factor in getting a lender to
          even take the loan. The other factors that are seriously problematic are the
          Lates on his current mortgage(s).

          I think the fees this borrower is going to be paying are very high, but the
          reason they are justified is that the borrower in not in a position to
          threaten to take his business elsewhere. There is no "elsewhere" that he can
          go to in his scenario.




          Comment

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