SKIPPING THE MORTGAGE PAYMENT March 28, 2020
Have you heard the news talk about skipping a mortgage payment? Or perhaps the news discussed forbearance options and delayed foreclosure or evictions? This is always the last resort because you signed a legal agreement to pay the mortgage payment if you want to keep the house. A home is not a right in this country.
Some borrowers will be tempted to skip payments whether they need to or not. Before you cancel that auto-draft, go to your lender‘s website which it has lots of options, mights and maybe’s. The note you signed with the attorney at the closing table has NO mights or maybes. Don’t be deceived. Those skipped payments are NOT forgiven but mIght or maybe delayed or restructured, resulting in a large lump sum or higher interest rate with a restructured mortgage payment months later.
If you have the financial resources, you should continue to make payments, as skipping payments will likely cause significantly more financial strain at a later date. If you really have no money and absolutely can not make your payment, don't just stop paying. Call your lender and discuss the options thoroughly so you understand the full consequences of your next step. The hold times and recordings may be long, but knowing their next step will be worth the wait.
UPDATE 4/30/2020- It seems the lenders and the government are working together to make reasonable adjustments to mortgage payment plans and provide solid information for those in need. The particulars are going to be unique with each lender and borrower, so please get the mortgage adjustments they offer in writing including whether they will be reporting these delayed payments to the credit bureau. If you have any problems where a lump sum payment for all the skipped payments is immediately requested after the relief, reach out to the CFPB for further assistance. The maximum relief which I have heard is 12 months of deferred payments, but your negotiations and personal circumstances will determine what is available to you. Be safe my friends!
Rates are hovering at 3.25%!
If you have a old mortgage and want cash out but still want your payment to go down, call me. I bet we can do that!
If you have a new mortgage, and your rate is over 4%, call me to check the numbers.
If you have a VA loan with a rate over 3.75%, we need to get you a streamline VA and drop that payment as well as skip a payment! I bet we can do that too!
If you were thinking about that second home or an income producing property in your portfolio, now is the time.
This is a fantastic time to get your real estate portfolio in order!
Add it to your list of things to do by calling me!!
New Threshold Mortgage, Inc.
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2500 Caladium Drive
Atlanta, GA 30345
#19238 NMLS LO License #169110 CO #168980
Residential Mortgage Licensee
ACCESSING THE 401(K)
you race to the bank and cash-out your retirement to purchase your castle, take a few minutes to
assess the implications outlined below.
you can't take money from your 401(K) plan until you retire, leave the company
or become disabled, but many accounts permit certain “hardship withdrawals” when
there is an immediate financial need. While hardship withdrawals are allowed by
law, your employer is not required to provide them in your plan. Sometimes this
"hardship withdrawal" includes the purchase of a principal residence. If unsure
as to whether yours does, check with your employer’s human resources
drawback of liquidating in this manner is that the funds are immediately taxable
since they were saved tax free. Likely they would be taxed at your current tax
rate, but it could be higher if the fund liquidation puts your income into a
higher tax bracket. There is also a penalty, typically 10% of the funds
withdrawn. The exact amount of the penalty is spelled out in your
is borrowing against your 401(K). Often you can borrow as much as
50% of your account balance. You pay interest on the loan, and the interest is
credited back to your account. Sounds great, eh? The money you receive is not
taxable either (as long it is paid back), and there is no penalty. Most
plans offer anywhere from five to thirty years to pay the loan. In a perfect
world, it's a perfect plan!
you set this ball in motion, it is very difficult to stop so make sure you
lender has seen the account where you plan to deposit the funds BEFORE you do
it. A good broker has an eye for anything funky on a bank statement. Also,
keep a copy of ALL the paperwork. This includes applying for the liquidation,
any correspondence from the bank, any check or wire record, and the printout
from the bank showing the funds transferred into your bank account. Be in full
communication during the liquidation process so nothing gets in the way of
obtaining your new home.
BLUES AND GREENS
REFINANCE BLUES- adj- The feeling you have when you know you need to refinance, but you are dreading the cost and the process involved.
REFINANCE GREENS - adj - The color of your wallet and your friend's faces when they know you are done with your home refinance.
This year will be one to remember! Rates hit in the 3's again, and lenders have come a long way in driving down closing costs too! It is very exciting!!
We may be able to WAIVE the appraisal. Ask me to check your GA property for eligibility. That's nearly $500 in savings! "YES WE CAN!"
We have access to Simple Refinance Closings. Ask me to use my closer if you are open to the option of where you close for $500-700 in savings. "YES WE CAN!"
If you don't want to wait 5-7 days for someone to underwrite your file, so you need an extremely long lock and months to get this done, let me know. "YES WE CAN!"
Does this Blog look obnoxious? YES IT DOES! But so is refinancing so lets just get it done!!
Call me/ Text me / Email me if your ready to do a quick crunch of the numbers and get the savings started! 678-467-2330
(If you already know what you generally want, go ahead and text "showmethemoney" to 36260 :)
The more you follow the automated application process, the more the savings are passed on to YOU! Apply from your phone!
Title Insurance - Is
It Worth the Extra Expense?
Likely, the biggest investment you will make is purchasing a
home. In the State of Georgia, determining the rights and interests to
real property is the responsibility of the
closing attorney who represents the lender.
Let's start with the basics but HANG WITH ME! This gets
really interesting at the end, but I need to review the basics first.What is title insurance?
Title is the paperwork for the ownership of property. Names on
the title change as the property is sold. The title company hired by the
attorney searches the title (or ownership) history of the property. Through its
research, the title company can almost always identify any title problems and
clear up these problems before you close on the property; however, sometimes
they miss something in the chain of title and that is where insurance comes in
play. Sometimes the problems include:
· Defective title —
"Defective title" covers any number of problems with the title to
your home. It can even include a "contested title". Defects are rare,
but they can be very difficult to get rid of, making the property inaccessible,
unbuildable, or unsaleable. Any number of other complex problems define
· Contested title — This happens when
someone who owned or even lived in the home before you claims to still have
ownership. If this happens, the title insurance company will defend your title
and the process will cost you nothing.
REQUIRED: Lender’s title
The lender requires you get LENDER'S title insurance that
protects the mortgage balance.
OPTIONAL: Owner’s title insurance
The OWNER'S TITLE protects your interest in the property and it
can vary in protection and cost. Here is the interesting part for the financially-minded: Attorneys are legally obligated to quote
STANDARD TITLE INSURANCE pricing unless they have permission within their forms
to quote an ENHANCED TITLE INSURANCE.
So I’m guessing you know what form most likely is include in their
Here is the only significant between the
STANDARD TITLE INSURANCE covers the equity between the purchase price
and loan amount at the time of purchase.
ENHANCED TITLE INSURANCE covers the house’s appreciation over a period
of five(5) years up to 150% of face value.
The ENHANCED policy sounds really good until you read that
sentence again. Five(5) years, not 15 years or 30 years, or even 7 years
(the average length of home ownership), is what they are covering extra with a significant jump in price. ASK
and comparison check before you agree to your new policy. If the State requires
STANDARD TITLE INSURANCE be quoted, that might be reason to pipe up
with the questions and shop carefully.
**And here is my
CMA - I am not an attorney and this is not legal advice. If you want more
information about title policies, search up
title insurance companies or get quotes for both policies yourself.
The holidays can put a dent in your savings especially if you're planning to buy a home, but there are several ways to cut costs so your finances aren't in the red by New Year's Day. Consider the following money saving tips:
Yes, you may feel a bit like a bit of a scrooge, but by keeping things low key, those friends and family might be thrilled to join in your summer cookout at your new home in 2019.
Although we'd like to believe the holidays bring out peace on earth and good will for all, the weeks between Thanksgiving and New Year's Day tend to be a prime season for criminals. During this busy time of year, you can take some easy precautions to prevent becoming a victim of theft. Consider the following safety tips:
When holiday shopping this week:
During the holidays, many people can become distracted then vulnerable to theft. These easy steps can protect yourself and your home from potential crime and ensure you have a safe and happy holiday season. Happy Thanksgiving!!
Avoid the Scam
Wire Transfer Fraud: A New
The security of my clients is a top
priority. There continues to be wire
transfer fraud focused on mortgage transactions. Now there is a new twist.
Hackers often attempt to divert closing proceedings from title companies,
attorneys, banks, and Realtors’ email with wiring instruction changes. The
thieves, who compromise buyer and seller email accounts to intervene when a wire
transfer is about to happen, are stealing thousands of dollars through these
wire transfer scams.
There is a new twist in
this – thieves will call the victim first as a cold call notifying them that
there has been a change and to look out for the email with the new
Tips for Buyers and Sellers
Verify Wiring Instructions
Customers receiving requests for changes to the wiring instructions should
verify the change with all of the involved parties using telephone numbers
previously provided. Under no circumstance should wiring instructions be
changed based on a phone call alone.
Do Not to Accept Wiring
Instruction Changes through email
Hackers target emails with wiring instructions. They use the information to
send a modified email with updated directions for wiring money into their
personal account. Never accept directions to modify a wire transfer from any
Watch for Name &
Be extremely wary of wires going to any account that is not in the name of the
escrow company or attorney. Also, be suspicious of any account with a
geographic location different than the seller—and never wire outside of the
United States. There are possible explanations for different names and odd
locations, but ALL red flags should be explored in detail with a phone call to the attorney's office with the number given to you verbally by me, your mortgage officer. It took some time to earn that money. Let's make sure it get to your new home.
Did You Know?
Making one extra principle and interest payment a year will knock about 7 years off your mortgage and save you thousands of dollars.
"Bi-Weekly" mortgage payment programs charge fees and do for you what you can easily manage. They say they save you an impressive amount of money on your mortgage and reduce the number of years you pay on your mortgage.
This is true, but you don't NEED them to get those savings, and by doing it yourself, you save even more money!
This is how they typically work: The company places your 1/2 mortgage payment in their account every two weeks, then they hold the payment until all of the mortgage payment is collected. During the course of a year 26 deductions will be made from your account. With the extra 2 deductions, the "Service" makes one additional mortgage payment every year. In other words rather than making 12 mortgage payments, 13 payments are made.
The enticement is that they are providing a special service when you don't have the time or discipline to make it happen.
The real story is that there is an easier way to do this - with no payment shock- and your mortgage company will immediately credit the payment to your account. Just deduct your mortgage payment automatically from your account each month with an additional 1/12 of your principle and interest payment applied to the principal balance each month. (Extra money is automatically applied to principle unless you tell your mortgage company to do something else with it.)
New Monthly Payment = Monthly Payment + (Principle & Interest /12) .
At the end of 12 months, you will have made an additional mortgage payment and you won't pay any fees to a servicer nor will you have had your money held in limbo. Now that just makes cents!
Remember me when you are talking homes!
I'm passionate about helping people achieve their home dreams
with the best possible financial options.
Teaching the 3rd Grade
Recently I had the distinct pleasure of participating in Career Day at our local elementary school. I started the lesson with self-employment. I explained, while it is nice being your own boss and having a flexible schedule, your success will directly reflect in your pay check and your reputation within the community.
It is difficult to properly convey the excitement of compound interest when your audience is eight-years-old. I was competing for their attention with police officers, firefighters, and marketing directors (who had lots of gadgets). Totally unfair!! So, instead, I reminded them, that though they may not want to be a loan officer, they may work with one when they want to own a home. They seemed to enjoy looking a house photos and discussing prices. We generally discussed how to buy a home too.
Finally, I explained the LIFE LESSON I wanted them to always remember, long after Career Day was over. (In the photo, that's what is highlighted on the board in yellow.) Maybe you know this lesson?
If your outgo exceeds your intake,
then your upkeep will be your downfall.
I think some of them understood our discussion and all of them wrote it down. I'm hopeful that a seed of financial knowledge has been planted on Career Day. Have a fantastic week! Need help on a mortgage? Grab my app at http://NewThresholdMortgage.com
The Changes for 2018 Taxes
Two lost housing deductions pop
off the new tax bill which you should know about, and I've also included one
reminder of an unchanged deduction.
They are no longer deductible
if you are not active military. Before they were deductible if
you moved over 50 miles for a job. There were more specific terms,
however, now it is simple. You
can't deduct the expense.
HOME EQUITY LINE
This product's interest has
been deductible forever, but no more. This essentially kills the benefits of
the piggy back loans (getting a first and second mortgage combination product),
though they have decrease in popularity over the last five years.
Having that handy equity line
available is still nice due to its low interest rate, but it is no better than
a low interest credit card and potentially worse for you, since it is tied to
real property. This makes it a much more secure bet for the lender and gives you no
added benefit for allowing the lender to hold a piece of your property’s
equity. You can't deduct the
Here's more information: https://www.marketwatch.com/story/most-home-equity-loan-borrowers-dont-understand-how-trumps-tax-code-affects-them-2018-02-02
Having no deduction on the
equity line make mortgage insurance more appetizing. Yes, I never thought I was say that either, but the legislature did
not touch the mortgage insurance deduction.
So, you could go get a fixed
rate second mortgage at 9% or so, or you could have the dream that the mortgage
insurance is going to go away in a few years, and during the life of the
mortgage insurance, it could be entirely tax deductible. Not a bad dream, sort
of, until you get to the “however”. And here it is. However, it’s only tax
deductible up to a point. If your adjusted gross income exceeds $109,000 or $54,500 if
married and filing separately, the IRS prohibits you from deducting mortgage
Here is more
ARE MY CHOICES IF I HAVE AN EQUITY LINE!?!?!?
-Bite the Bullet and Endure
Honestly, it might not
matter. The “might” is the problem, so take the second choice.
- Review your debt allocation and consider whether a refinance will benefit
If you want to look into
rolling the first and equity mortgage together, let’s take a look. Even if you need a bit of mortgage insurance
for a time, it may still be beneficial due to the tax deduction. We can look at your gross adjusted
income, how much you pay in interest with your current mortgage profile, and
what is deductible currently vs. the future, then you can consult your tax advisor too.* Shoot me an email or text for a review.
*As you know, I am a
mortgage broker, not a tax advisor.