Without protective laws, garnishments can victimize poor, elderly Belleville News Democrat
But speedy justice was denied Tran, as it is for many debtors whose savings or paychecks are seized in a legal process called garnishment.
At nearly every stage of the process, the deck is stacked against consumers. In Minnesota, unlike most states, collectors can start a lawsuit without filing anything in court. If a consumer doesn't respond, they can seize bank accounts or part of a paycheck. Most states require judicial oversight. But in Minnesota, collectors can take people's money without proving in court the debt is owed.
The bad economy and the rapid growth of a new industry that collects old debts once deemed uncollectible have sharply increased garnishments. In Minnesota, court-approved seizures have more than tripled over four years. No one tracks garnishments taking place outside the courts.
When mistakes occur, consumers often must go to court and prove it. Their money already taken, they typically cannot afford an attorney and must navigate the court system alone. Cases get bogged down while checks bounce and bills go unpaid. Some people, like Tran, are left so destitute that they go hungry.
Mortgage Note Purchase - Principal Reduction Program
getmortgagereduction.com - The Note Purchase Program can help homeowners with Negative Equity Reduce their current Mortgage Principal Balance to ...
What will my mortgage interest rate be with a FICO in the low 600s and income around 60K?
I am looking for a first home. I am four years post-bankruptcy. Sure, I could continue to try to build stronger credit, but life is short, and home ownership is an important goal for me to reach in the near future.
In my area, I have heard that first-time home owners can get rates for 30-yr mortgages around 5.8%. What kind of rate can I expect to qualify for? I know it depends on lots of other factors I'm not going to get into here. But what is a rough estimate? 7%? 9%? 12%?
I have no savings for a downpayment (a strike, I know), but my debt-to-income ratio is reasonable.
You're right on track with your own assesment. The "no savings" certainly hurts on interest rate but you can, and should, still buy a house.
The last answer was correct that one of the main benefits of owning a home is gaining that equity. When you continue renting you are netting 0% equity. No matter if your rate is 3% or 12% you are not paying much down on your principle for the first few years anyway. Your equity is gained by the increasing value of YOUR home. So I suggest you buy now.
First, check out my blog to learn more about the mortgage process: http://explaintome.blogspot.com
Find a mortgage broker that will walk you through this process.
Your situation puts you into two different loan categories. You could possibly qualify for a rate of about 6% but since you are borrowing more than 80% of the sale price, you would have to pay PMI. That can be very expensive. That's why you should never concentrate completely on rate. Look at your total payments.
Most likely you'll fall into a non-conventional, or subprime, loan. You'll be between 7.5% and 8.5% on your first mortgage of 80% and around 10% on your second. If you can afford the payments, it may be worth it to you. After two years or so you can refinance. Hopefully your credit is in better shape but you can use your equity in the property to give you the best rates available at that time.
Best of luck!
It does not sound like it will make sense financially.
I think Century 21 has one of those calculators you can run the numbers on...
What all is considered when applying for a mortgage???
I have decent credit scores (680-725)
income 40,000 yr/3333 mnth
about 20,000 in the bank
debts of 5,300 for a car (115 a month)
small credit card debts (40 a month)
6 months at my job, but previously in college, I am now working in my field of study, and I graduated magna cum laude from my college.
my current debt to income is 4.95%
If I can get the loan I want (around 850 a month) the debt/income will be about 29-30% (including mortgage, taxes, insurance, and other debts listed above)
What else might be considered when I go to apply for a mortgage....does anybody see any areas where I should improve?
The only other aspect you might think about it how much you're planning on putting down. With those credit scores and DTI. If you put 20% down you'll get probably one of the best rates out there
Good Income, how high can I get a mortgage for a house?
If I am making about $250k a year, with excellent credit score and history, and my monthly expenses (car, living, etc) are about 30% of my income, with no other debts, how high can I mortgage a house for?
Hypothetically speaking - can I buy a $1 million house and mortgage it with my profile? is there a formula to figure this out?
thanks
Dr W,
The only way to find out is to speak with a mortgage banker/broker.
It's really that simple. They will run all the numbers including property taxes and insurance to determine what you qualify for.
There is a formula that can help but its kind of like trying to perform your own tonsillectomy. You take your monthly debt payments(including the proposed monthly mortgage payment including taxes and insurance)and divide that by your gross monthly income to determine your debt to income ratio. With super jumbo loans the ratios allowed could be as low as 38% and it will also hinge on how much money you put down. I can tell you that I have seen rates on jumbo loans as low as 5.75% with some of my portfolio investors.
http://www.bankrate.com/brm/calculators/mortgages.asp (USE the How Much Can You Afford tool)
http://www.bankrate.com/brm/mortgage-calculator.asp
How much does my income have to be if I want to purchase a $120,000 mortgage?
My annual income is 30,000 and I have no debt at this time.
the rule of thumb is you should keep the value of house you buy around 2 1/2 times you gross income.
Using this rule for a 120,000 mortgage you would need an income of $48,000.
Of course that is ONLY a rule of thumb. You should also figure in how much money you have to spend on a mortgage. Safest way to play is to determine what the maximum monthly house payment you think you can make is and then talk to the realator about how large of a mortgage that equates to.
Hope that helps.
P.S. You will have txes and utility bill, and home owners insurance etc.
Put together your last W2, your last paystub, and your last two months bank statements (all pages) for your lender to review. If you do that, you have done 99% of what you need to do to close.
Should I take out a 2nd mortgage to pay for my credit card debt?
My husband and I are in our late fifties. He is disabled and is on a set income. We only make enough money to pay a our bills. There is very little money left over for gas, groceries or everyday living. We owe 25,000 in credit card debt and have about 30,000 in equity in our house.
If you took out the loan could you make the payment? If so I say yes its a good idea. Good luck!
Side note: Once you wipe out credit card debt get rid of as many cards as you can and just keep a few. Best to use a checkcard or debit card from your bank account.
If you are on a set income and can't afford your bills now, the very first thing you need to do is cut up all of your credit cards, so that you will not be tempted to spend any more.
From now on......only buy what you can afford to pay off with cash.
You are headed down the road to financial disaster if you don't get your spending under control.
But you can do this with careful planning.
If you do the consolidation route....I would not take out all of your home equity. Pay down most of your credit card debt, but keep that which you can make small payments on and still survive.
It would be good to keep some of your equity as an emergency because it sounds as if you probably don't have much set aside for retirement and your home equity may have to be it.
All I can add is this: If you go this route you MUST change your spending habits. That means no more credit!
I have seen this mistake happen over and over. People get equity mortgages or consolidation loans, then pay off their credit cards. Then they turn around and start using their now-empty cards again. The next think they know, they have doubled their debt. The end up filing for bankruptcy.
Just don't fall for this trap. You are already too stretched out on finances, and now you are putting your house at risk.
Be carefull.
USA What is your personal debt VS your income is this really the biggest threat Financial Security?
Your share of the National debt today is $28,357.78 of which you had no say in! 30 year fixed mortgage three quarters of the monthly payments goes to the mortgage lender! Interest rates on other loans & financing can put people on the street! It is very difficult to find a decent job that pays enough to keep pace with the consumer retail price index.
And it's just going to get worse as long as the rich are entrenched in congress.
Should I refinance into a 15 year of 30 year mortgage?
I can refinance into a 15 year mortgage for an increase of $75 per month, or into a 30 year mortgage and save $261 per month. I am less then 3 years into my original 30 year mortgage. This is because I am paying PMI right now, and my rate is 6.375%. Here are my loan options:
15 year, no PMI, 4.375% rate
30 year, ~$90/month PMI with a $3300 upfront PMI funding fee. 5% rate. This brings the effective rate to about 5.85% compared to the 15 year mortgage.
With the 30 year mortgage I will save about $375 a month over the 15 year mortgage.
I currently save about 25% of my monthly paycheck into various accounts (Roth 401k, Roth IRA, Stock Options, Savings, etc), so the $75 isn't necessarily difficult for me as I can adjust. What would everyone recommend? I know I could earn a return greater than 6% long term on invested money (especially with this down market turning around in the next few years), but I could own my house straightup, guaranteed in 15 years, and the interest rate is 1.5% lower. I also understand the income tax implications, I am in the 25% tax bracket. Single male, with only student loan debt and a mortgage. Thoughts?
How exactly do Section 502 Rural Housing Loans subsidize a monthly mortgage payment?
Im looking into obtaining a section 502 rural housing loan from the USDA for low-income people. I have researched some of the usda's info but cant find answers to my specific questions. My questions involves the repayment ratio, amount of mortgage financed, and subsidy. From what I understand, the income and debt of the household is used to determine the amount of the mortgage that the program gives to you - so that the mortgage, taxes, insurance, and interest will be no greater than 30% of the total income. What is confusing me is this: first, I dont understand where the subsidy comes in - does the govt subsidize the payment so that it will be less than 30% of income, or are you only allowed to buy a home if the payment is 30% of income. Second, using 30% of my total household income towards a mortgagae payment would never let me buy a home in my area, where the cheapest house costs $300,000. So can someone please clarify these questions and the program basics. Thanks!!
Guaranteed Rural Housing Loans (Section 502)
INTRODUCTION
The Rural Housing Service (RHS) is a part of the U.S. Department of Agriculture (USDA). It operates a broad range of programs that were formerly administered by the Farmers Home Administration to support affordable housing and community development in rural areas. RHS both provides direct loans (made and serviced by USDA staff) and also guarantees loans for mortgages extended by others.
The RHS National Office is located in Washington, D.C., and is responsible for setting policy, developing regulations, and performing oversight. RHS employs a central collection and servicing center in St. Louis, Mo. and a computerized system called DLOS for Section 502 direct and Section 504 loans. In the field, RHS operations are carried out through the USDA's RD offices. Each RD State Office administers programs in a state or multistate area. The organization of Rural Development offices within a state varies, but typically Area or District Offices supervise Local Offices (also termed county or community development offices) and do the processing and servicing of organizational loans and grants. Local Offices process single family housing applications, assist District Offices with organizational applications and servicing, and provide counseling to applicant families and backup servicing as needed.
PROGRAM BASICS
Purpose
The Section 502 Guaranteed Rural Housing Loan Program is designed to serve rural residents who have a steady, low or modest income, and yet are unable to obtain adequate housing through conventional financing. These loans enable low- and moderate-income rural residents to acquire modestly priced housing for their own use as a residence through the purchase of a new or existing dwelling or the purchase of a new manufactured home. In this variation of the Section 502 program, RHS does not make a loan directly to an eligible borrower, but guarantees a loan made by a commercial lender. This guarantee substantially reduces the risk for lenders, thus encouraging them to make loans to rural residents who have only modest incomes and little collateral.
Eligibility
An eligible applicant must have an adequate and dependable income (up to 115 percent of adjusted area median income [AMI]) and a decent credit history, and be unable to qualify for conventional mortgage credit. RHS uses two formulas to determine a family's ability to undertake the responsibility of a mortgage. First, the burden of principal, interest, taxes, and insurance (PITI) must be 29 percent or less of gross monthly income. Second, the total of monthly debts must be 41 percent or less of the gross monthly income.
Terms
Loans must be from lending institutions that have been approved by RHS. Loans have 30-year terms and fixed rates at market interest rates. Loans may be for up to 100 percent of market value or for acquisition cost, whichever is less. The maximum loan amount is based on what the homeowner can afford. Loans may include closing costs, legal fees, title services, cost of establishing an escrow account, and other prepaid items as long as the appraised value is higher than the sales price. In addition, RHS charges the lender with a one-time guarantee fee of 2 percent of the loan amount. The lending institution may choose to pass this charge along to the borrower. No private mortgage insurance is required, and the loans have Fannie Mae and Ginnie Mae acceptability on the secondary market.
RHS guarantees the loan at 100 percent of the loss for the first 35 percent of the original loan and the remaining 65 percent at 85 percent of loss. The maximum loss payable by RHS cannot exceed 90 percent of the original loan amount.
Standards
The residence to be purchased with the guaranteed loan must conform to the CABO Model Energy Code and to the structure, facility, and termite standards established by the U.S. Department of Housing and Urban Development. There are no restrictions on size or design. Typical amenities, except in-ground swimming pools, are allowed. Manufactured homes must be new and permanently installed.
Approval
Interested borrowers should contact their local Rural Development office for more information on the program and a list of approved lenders. The loan application itself is made with the approved lender, and is subject to their schedule for loan approval. Approximately 30 percent of guaranteed 502 loans are made to families with incomes below 80 percent of AMI.
Basic Instruction
Instruction 1980-D.
Differences Between the Section 502 Guaranteed and Direct Loan Programs
There are several other Section 502 loan programs, but the only one which approaches the guaranteed program in number of loans granted is the Homeownership Direct Loan Program. This program once accounted for almost all the Section 502 loans, but the number of guaranteed loans has greatly increased in the last few years. In Fiscal Year 2001, the guaranteed program obligated approximately $2.3 billion for 29,326 loans, while the direct program obligated approximately $1.07 billion for a total of 14,789 loans. The important differences between the Section 502 guaranteed and direct loan programs are as follows:
* The lender for Section 502 guaranteed loans is a private savings and loan institution, bank, or mortgage company which also handles all the loan servicing. The lender for the direct program is the Rural Housing Service; Rural Development handles the servicing.
* Income levels for Section 502 guaranteed borrowers are capped at 115 percent of the area median income. Income levels for the direct program must be no more than 80 percent of the AMI.
* Payment assistance subsidy is not available through the guaranteed program. Payment assistance, which can reduce the interest paid on the mortgage to as low as 1 percent, is available for borrowers in the direct program and is based on the borrower's income as a percent of AMI.
* Borrower protections differ between the programs. Applicants for guaranteed loans do not have the rights of moratorium or of appeal that accompany the direct program. Also, in the case of default, Section 502 guaranteed loans are liquidated by the commercial lender, while direct loans are liquidated by the government.
ADDITIONAL INFORMATION
For additional information on Section 502 and RHS, contact the RHS National Office, 1400 Independence Avenue, S.W., Room 5037S, Washington, D.C. 20250; 202-720-4323. Contact your Rural Development State Office to find out the location of the Local Office closest to you. (Visit http://www.rurdev.usda.gov/recd_map.html for the address and telephone number of your State Office.) Copies of RHS regulations are available at http://www.rurdev.usda.gov/regs/.
HAC's publications list, all information sheets, and most full-length manuals and reports may be obtained free from HAC's web site at www.ruralhome.org. A printed copy of the publications list is available free, and copies of manuals and reports are available for a charge to cover costs, from HAC, 1025 Vermont Avenue, N.W., Suite 606, Washington, D.C. 20005; 202-842-8600.
This Information Sheet was prepared by the Housing Assistance Council. The work that provided the basis for this publication was supported by funding from the Ford Foundation; an earlier version was supported by funding under Cooperative Agreement H-5925 CA with the U.S. Department of Housing and Urban Development. The substance and finding of that work are dedicated to the public. The publisher is solely responsible for the accuracy of the statements and interpretations contained in this publication and such interpretations do not necessarily reflect the views of the government.
What is a typical income requirement for a mortgage? 4x? Also, no initial cost mortgages, worth it?
I'm looking to find out what banks would "typically" require for income for a mortgage. Also, if they would look at gross pay or net pay, what debts they look for to calculate it, and if they include home-owner's insurance in the estimate of a monthly payment. Also, my wife and I have student loans, but they are on deferment since we are both in school. Would it make any different if we got the loan before my wife's payment became due in January? I'm not interested in doing any kind of high risk loan. I just want a strictly "safe" 20% down, 30 year mortgage.
My story is this: I'm trying to finish college. I decided that I wanted to get married young, then we had my daughter which slowed school down a lot. I had about a year before finishing, then we just found out that my wife was pregnant again, even though we took precautions against it. Now that I'm looking at having two children, I feel like I need to get out of these apartment complexes and get into a solid home that I can call my own. I understand that there are plenty of benefits to apartments, like on-site maintenance, but I'm pretty handy and the benefits are losing their value. I've looked around at several houses in the area and found some relatively cheap houses on the market that would fit my wife's and my tastes. I have access to enough money for a 20% down payment for most of these houses. My biggest worry about affording a house would be the closing and other associated costs. Bank of America offers a no-closing-cost loan, but I feel like they might have such a high interest rate that it wouldn't even be worth it. Does anyone have any experience with this loan or something else similar?
Banks you GROSS income per month.
They use ratios. They will do up to 32-36% of gross income for a total mortgage payment (principle, interest, taxes, insurance and PMI (if less then 20% down).
HOWEVER!!!!!! I would recommend never to go over 25% of gross income.
What interest rate can I expect on a mortgage loan with my credit scores?
What interest rate can I expect on a mortgage loan with my credit scores?
Today I have 564 588 654...I am hoping to have my mid-score up 10 pts by tomorrow, and then i am applying for the loan with the bank. I want a fixed rate, 100% financing, 30 yr loan for $160,000. My income and debt ratios are good. I am closing on the Aug 6th. I have already had the house appraised at $162K, I am paying over $5K in closing costs, and the house has been inspected. This is my first home purchase, is there anything I am missing?
Im not sure you can get 100% with your mid score. Now adays the banks are way tougher than they were a couple of years ago, If they do the loan you're probably looking at an 80-20 "2 loans 1 for 80% and 1 for 20%. The 80% one probably around 9%-10% and the 20% one at around 13%.
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