Terry Parker asked:


What is mortgage refinancing? When you purchased your house, you took out a loan, (your mortgage) which is now in first lien position in position to be paid first. When you refinance, or take out a second mortgage, your new loan moves into second lien position.

This usually means that your first mortgage will be paid off by the second one, which will then move into first lien position. What are the benefits of a San Diego mortgage refinance?

To start, you will most likely be able to pay off your first San Diego mortgage loan, and be left with just the second one, which will be even more beneficial if you were able to obtain a fixed or lower interest rate on mortgage number two.

A second mortgage is also a useful tool for debt consolidation and a way to get money for home improvement through options like 125 percent home loans, home equity loans and home equity credit lines. Last, but not least, the second mortgage typically carries a term of no less than five years of interest only payments, which is definitely a factor to consider.

What are my San Diego mortgage refinancing options?

In addition to the traditional type of second mortgage taken out by homeowners wishing to lower their interest rate, options also exist that allow individuals to borrow against the equity of their home, and use this money for home improvement, or other purposes.

Two of the most common ways of doing this are with a home equity loan (HEL) or a home equity line of credit. (HELOC) The following section contains frequently asked questions and answers concerning HEL and HELOC loans, how they differ from a traditional refinance, and how to determine which second mortgage option is best for your personal financial needs.

Home equity loans and home equity lines of credit

home equity loans are a potentially money saving option for homeowners who want to consolidate debt and/or turn some of their bad credit into good credit.

The possible tax deductions on home equity loans make them potentially useful for debt consolidation, since other personal and consumer loans typically have no tax deductions and higher interest rates. A home equity loan can also be used for home improvement purposes, and certain tax advantages can apply.

According to current home equity statistics from the U.S. Census, approximately 7.2 million Americans obtained home equity loans in the past year. However, not all loans are right for everyone. It is important to decide which type of home loan is the perfect fit for you.

To be sure that you are making a confident financial decision before you sign on the dotted line, read on for answers to frequently asked questions (FAQ) about home equity loans.



BRIAN

Kris Koonar asked:


Many people have little idea about the finer details of a foreclosure. Most wait for the creditor to come knocking at the door to try and access some information about foreclosure.

The following are some Frequently Asked Questions or FAQs, which usually arise:

Q. What is a foreclosure?

A. Usually, when banks make an attempt to recover money owed, it is based on promissory notes after selling the collaterals. In simpler terms, the money you borrowed in order to refinance or buy a home is given to you only under the promise that you will repay in time or the house would be confiscated.

Q. Does the bank has the right to kick me out of my house?

A. No. Only court orders can give anyone the right to ask you to leave your home. Eventually, you might be forced to leave, but there are court-procedures that the mortgage holder is expected to abide by.

Q. Can you explain the pre-fore closure steps?

A. Pre-Foreclosure follows:

. Customer missing the mortgage payment.

. Bank sending a late notice.

. Customer missing the additional payments as well.

. Bank trying to contact the customer over the phone and through mail in writing and via the phone to contact the customer and resolve the situation.

. No agreements, but the customer continues to default.

. Bank demanding for payment under the note in full. This is based on the acceleration clause.

. No arrangements or payments acceptable to the bank are made.

Q. What makes a workout better for me?

A. Workouts allow a person to avoid the credit and emotional scars caused due to bankruptcy. In the case of people with hard assets like real property, workouts allow them to retain greater control and increase possibilities of retaining the assets. Soft assets like cash can also be secured.

Q. What are deficiencies?

A. Suppose you make a promissory note of $ 100,000 to the bank. This is loaned to you for recovering or buying a new house. You owe the bank $100,000. After five years, you go through a foreclosure and the bank acquires $ 90,000 after sale, but you still owe them $10,000 more. This is called a deficiency. In addition to the $10,000, other charges like the legal and foreclosure charges applicable will also be added. Very often the deficiency becomes an unsecured debt after foreclosure.

Q. How can a person work out the unsecured debt?

A. A common way of working out unsecured debts is to pay them off in lump sum amounts. This is done to establish a long-term payoff plan. This policy also applies to credit cards.

Q. How would a person know what is the best option?

A. This is a very complicated question and the answer depends on the assets a person owns, income, liabilities, expenses and the other underlying reasons for foreclosure. Solutions depend on the type of mortgage a person has opted for and how he plans to save the house.

Q. Do the potential bidders and attorneys have to come inside the house during a foreclosure sale?

A. No. Mostly, they limit themselves to the front lawn. You could opt to invite them inside the house, but there is no such obligation. If the debtor feels that he is about to lose the house and would be left with no deficiency, he may choose to invite the attorneys and bidders inside the home.



DEWEY