Few things sound better than paying off a thirty-year Brooklyn real estate mortgage early.  Not only will you be free of mortgage payments, you could also save thousands of dollars in interest payments over the life of the loan.  Here are four ideas to help you pay off your mortgage early:

1. Apply any windfall monies you receive to your mortgage balance.  Be sure to indicate that this is an extra payment and should be applied exclusively to your principle.
2. Make bi-weekly mortgage payments.  Making exactly one-half payment every two weeks will add up to a total of twenty-six half payments per year.  Or, thirteen whole payments each year instead of twelve.  That’s the secret to paying off a Brooklyn real estate mortgage early with bi-weekly payments.  The interest rate itself isn’t reduced, but the amount of money you pay in interest on the principal is.
3. Overpay a fixed amount every month.  By sending in an extra fixed amount as an additional principal payment every month, you’ll reduce the length of time it takes you to pay off your mortgage. By sending in a fixed amount every month, you can easily automate this process.
4. Use a prepayment calculator to figure out other ways to pay your mortgage off early.  The free prepayment calculators available on the internet can also help you determine how quickly you can become mortgage free.

Before implementing any of these methods to pay off your Brooklyn real estate mortgage early, contact your mortgage lender to find out if you’ll be incurring any additional fees.  It’s also a good idea to ask your mortgage lender if there are any specific instructions you need to follow to be sure your payments are processed correctly.

Thinking about buying a home in Brooklyn New York that you can pay off quickly?  Call me now at (718) 253-9600 ext.206 or email me at [email protected] for more information.

Charles D’Alessandro

[email protected]
tel 718 253-9600
fax 718 253-9573

Brooklyn Real Estate Blog Why Isn’t Your Brooklyn Real Estate Selling?

Will Mortgage Servicers Become the Country’s Landlords?

Foreclosures have skyrocketed over the past two years and even more are predicted in the coming year. Not only are massive foreclosures tragic for the individual families losing their homes, but they are also responsible for major lender losses, resulting in the current mortgage credit crunch. They have caused dramatically dropping house prices, and increased crime and problems for neighborhoods where foreclosures are rampant. Banks, consumer advocate groups, and the government have been searching for ways to stem the tide of these destructive defaults.

Enter the Deeds For Lease (D4L) program from government-controlled mortgage financier Fannie Mae. With this initiative, Fannie Mae would essentially become the landlord for seriously struggling homeowners. It is designed to “minimize family displacement, deterioration of neighborhoods caused by vandalism and theft to vacant homes, and the effect these have on families, communities and home price stabilization.” Here’s how it works:

A homeowner with a Fannie Mae-backed mortgage facing foreclosure must contact their servicer to see if they qualify. If the homeowner does not qualify for any other home loan

help, like mortgage modification or a short sale, then he/she may be eligible for the program. These homeowners must also be able to afford rent at the current market price. At that point the borrower turns over the home’s deed to the bank, the bank forgives the loan, and the borrower is allowed to rent the same home back from the bank for up to 12 months. During that time the renter will be expected to figure out other living arrangements so that the bank can then sell off the house.

Will other banks follow suit in order to stop losing money on foreclosures? Not likely, according to a recent online Time article. It quoted Cheryl Lang, CEO of Integrated Mortgage Solutions, as saying the main problem lies in the legality of the program. “Once a lender takes possession, if there’s a mold issue or Chinese drywall, whatever the problem is with that house, whether or not the lender is aware of it, that’s a liability.”

Many of the nation’s largest lenders, including Citigroup and JPMorgan Chase, have meager interest in converting homes into rentals. “We’re in the lending business,” says Chase spokesman Tom Kelly. “We’re not really equipped to be landlords.” Lenders are sitting on nearly half a million repossessed houses nationwide, but getting rid of them quickly, even if that means taking a hit on price, seems to be the preferred response. A recent presentation by the head of Chase’s retail-financial-services division showed that the company’s servicing portfolio went from having about 52,000 repossessed homes in September 2008 to only some 30,000 in September 2009. Over that period, the average price at which the firm sold houses from that stock dropped from $175,000 to $150,000.

Now, none of that means rent-backs won’t eventually take off. There are plenty of examples in recent past of housing policies starting at the federal housing agencies and later expanding industry-wide thanks to strong-arming from some combination of the Obama administration and Congress. Loan modifications are the quintessential example. Perhaps one more relevant bit here is the law that was passed earlier this year requiring banks that repossess houses to honor the terms of existing leases (i.e. to not immediately kick out any existing renters). Fannie Mae already had such a policy in place. Over the summer, an Assistant Secretary of the Treasury Department told a Senate panel that the administration was considering rent-backs, but the idea hasn’t gained traction since then.

After all, the big administration push has been loan modifications. Earlier this week, Treasury reported that through October more than 650,000 homeowners have received trial modifications under the government’s “Making Home Affordable” plan. How long lasting that help will be, though, is a different question. As of Sept. 1, only 1,711 borrowers had successfully completed the trial phase and received permanent changes to their loan terms, according to a report by the Congressional Oversight Panel.

If loan modifications aren’t the long-term success the administration is banking on, people will wind up losing their homes to foreclosure anyway, and the number of repossessed properties owned by banks will again rise. According to foreclosure tracker RealtyTrac, the number of foreclosure notices nationwide has been ticking down the past three months, but the number of notices is still running about 19 percent higher than last year. Considering high unemployment and how many people still owe more on their mortgages than their houses are worth, there might be a chance yet for attention to turn to the idea of renting houses back to former owners.

If you’re thinking of selling your Brooklyn home, and you expect that the total amount you owe on your mortgage will be greater than the selling price of your home, you may be facing a short sale. A short sale is one where the net proceeds from the sale won’t cover your total mortgage obligation and closing costs, and you don’t have other sources of money to cover the deficiency. A short sale is different from a foreclosure, which is when your lender takes title of your home through a lengthy legal process and then sells it.

1. Consider loan modification first. If you are thinking of selling your home because of financial difficulties and you anticipate a short sale, first contact your lender to see if it has any programs to help you stay in your home. Your lender may agree to a modification such as:

· Refinancing your loan at a lower interest rate

· Providing a different payment plan to help you get caught up

· Providing a forbearance period if your situation is temporary

When a loan modification still isn’t enough to relieve your financial problems, a short sale could be your best option if

· Your property is worth less than the total mortgage you owe on it.

· You have a financial hardship, such as a job loss or major medical bills.

· You have contacted your lender and it is willing to entertain a short sale.

2. Hire a qualified team. The first step to a short sale is to hire a qualified real estate professional* and a real estate attorney who specialize in short sales. Interview at least three candidates for each and look for prior short-sale experience. Short sales have proliferated only in the last few years, so it may be hard to find practitioners who have closed a lot of short sales. You want to work with those who demonstrate a thorough working knowledge of the short-sale process and who won’t try to take advantage of your situation or pressure you to do something that isn’t in your best interest.

A qualified real estate professional can:

· Provide you with a comparative market analysis (CMA) or broker price opinion (BPO).

· Help you set an appropriate listing price for your home, market the home, and get it sold.

· Put special language in the MLS that indicates your home is a short sale and that lender approval is needed (all MLSs permit, and some now require, that the short-sale status be disclosed to potential buyers).

· Ease the process of working with your lender or lenders.

· Negotiate the contract with the buyers.

· Help you put together the short-sale package to send to your lender (or lenders, if you have more than one mortgage) for approval. You can’t sell your home without your lender and any other lien holders agreeing to the sale and releasing the lien so that the buyers can get clear title.

3. Begin gathering documentation before any offers come in. Your lender will give you a list of documents it requires to consider a short sale. The short-sale “package” that accompanies any offer typically must include

· A hardship letter detailing your financial situation and why you need the short sale

· A copy of the purchase contract and listing agreement

· Proof of your income and assets

· Copies of your federal income tax returns for the past two years

4. Prepare buyers for a lengthy waiting period. Even if you’re well organized and have all the documents in place, be prepared for a long process. Waiting for your lender’s review of the short-sale package can take several weeks to months. Some experts say:

· If you have only one mortgage, the review can take about two months.

· With a first and second mortgage with the same lender, the review can take about three months.

· With two or more mortgages with different lenders, it can take four months or longer.

When the bank does respond, it can approve the short sale, make a counteroffer, or deny the short sale. The last two actions can lengthen the process or put you back at square one. (Your real estate attorney and real estate professional, with your authorization, can work your lender’s loss mitigation department on your behalf to prepare the proper documentation and speed the process along.)

5. Don’t expect a short sale to solve your financial problems. Even if your lender does approve the short sale, it may not be the end of all your financial woes. Here are some things to keep in mind:

· You may be asked by your lender to sign a promissory note agreeing to pay back the amount of your loan not paid off by the short sale. If your financial hardship is permanent and you can’t pay back the balance, talk with your real estate attorney about your options.

· Any amount of your mortgage that is forgiven by your lender is typically considered income, and you may have to pay taxes on that amount. Under a temporary measure passed in 2007, the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act, homeowners can exclude debt forgiveness on their federal tax returns from income for loans discharged in calendar years 2007 through 2012. Be sure to consult your real estate attorney and your accountant to see whether you qualify.

· Having a portion of your debt forgiven may have an adverse effect on your credit score. However, a short sale will impact your credit score less than foreclosure and bankruptcy.

Note: This article provides general information only. Information is not provided as advice for a specific matter. Laws vary from state to state. For advice on a specific matter, consult your attorney or CPA.

Charles D’Alessandro
Fillmore Real Estate
[email protected]
tel 718 253-9600
fax 718 253-9573

Contact Me

Brooklyn Real Estate Blog Freddie sees mortgage rates hitting 6% in 2010

Freddie sees mortgage rates hitting 6% in 2010

The average rate on a 30-year, fixed-rate mortgage rose to 5.05 percent this week after hitting an all-time low earlier this month. (Tim Rue/bloomberg News) Enlarge Photo 10 Comments  |  View All » Your browser’s settings may be preventing you from commenting on and viewing comments about this item. See instructions for fixing the problem. Discussion Policy CLOSE Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain “signatures” by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post. Who’s Blogging » Links to this article

By Dina ElBoghdady

Washington Post Staff Writer
Saturday, December 26, 2009

After hitting an all-time low in early December, the average rate on a 30-year, fixed-rate mortgage rose to 5.05 percent this week and could climb to 6 percent by the end of 2010, if not sooner, according to giant mortgage financier Freddie Mac.

The results are noteworthy because rates have not topped 5 percent since the last week of October, when they reached 5.03 percent, based on the results of this closely watched survey, which polls lenders during the first three days of every week.

Many firms regularly track interest rates and come up with slightly different numbers because they survey different lenders at different times of the day or week. But several have reported the upward trend in recent weeks. They attribute it in part to the effects of the holiday season, when demand for buying and refinancing homes dies down and financial markets coast through the end of the year.

“However, this is also a glimpse of what we’re going to see in 2010,” said Greg McBride, a senior financial analyst at Bankrate.com, a personal finance Web site.

The key catalyst for interest rates going forward will be the end of a Federal Reserve program that buys a sizable chunk of mortgage-backed securities issued by firms such as Fannie Mae and Freddie Mac. That program succeeded in immediately pushing mortgage rates well below the 6 percent mark when it was announced last year.

But the Fed has committed to winding down the program by March. The central bank is betting that by gradually tapering its purchases, private buyers of mortgage-backed securities, who have largely been absent from the market, will return and rates won’t rise much.

But Amy Crews Cutts, deputy chief economist at Freddie Mac, said interest rates are bound to rise to 6 percent by the end of 2010 because private buyers will demand a higher rate of return on the securities than the Fed did. Lenders may have to raise the rates they charge to consumers in order to make that happen.

“Extraordinary resources have been put into keeping the rates down and supporting the mortgage markets and it’s hard to imagine that the rates can go much lower than they are,” Crews Cutts said. “Anything we get at or below 5 percent is a gift at this point.”

This week’s Freddie Mac survey found that the 5.05 percent average on 30-year fixed-rate loans (with an average 0.7 point) was up from 4.94 percent the previous week but down from 5.14 percent at the same time last year. The all-time weekly low since the firm started tracking the numbers in 1971 was in the first week of December, when rates fell to 4.71 percent.

Many borrowers have not been able to secure the best rates because they lack the stellar credit scores and hefty down payments that many lenders now demand. Some who have tried to refinance have not been able to qualify because their home prices have plummeted to the point where they now owe more on their mortgages than their homes are worth.

But anyone who can secure a loan should not wait much longer, especially if they are looking to refinance, McBride said. Homeowners are more sensitive to interest rates when they refinance than when they buy a home.

“The difference between 5 percent and 5.5 percent could mean the difference between refinancing or not,” he said.

But the interest rate is less critical to people who want to buy a home, McBride said. In that case, price and affordability should trump interest rates.

The general rule of thumb is that your monthly mortgage payment (property taxes and insurance included) should not exceed 28 percent of gross pay. All your loans combined — mortgage, car, credit card, student debt — should not exceed 36 percent.

“Yes, a higher mortgage rate would steal some buying power, but it doesn’t price buyers out of the market entirely because 6 percent is still pretty low,” McBride said. “If you can’t afford the house with rates at 6 percent, you can’t afford the house.”

Charles D’Alessandro
Fillmore Real Estate
[email protected]
tel 718 253-9600
fax 718 253-9573

Contact Me

Brooklyn Real Estate Blog Freddie sees mortgage rates hitting 6% in 2010

— @ WiseStamp Signature. Get it now

As the number of foreclosures rise around the nation, some lenders have held their foreclosures in Brooklyn in private stock, hoping to sell them gradually in a stabilizing real estate market. That hope has slowly dwindled, however, even with the five-month extension on home buying tax credits signed by the President November 6^th of this year.

Government-owned Fannie Mae may have come up with a solution.

Deed-in-Lieu

Some homeowners facing foreclosures in Brooklyn have more than foreclosure, loan modification or short sale options. Some qualify for a deed-in-lieu (DIL), where they sign away all their equity back to the lender and walk away “debt free” (except, possibly, for taxes). Unfortunately, a DIL leaves the homeowner without a home to live in, and the lender with a house to sell in an uncertain market.

Deed for Lease Program

Under Fannie Mae’s new Deed for Lease Program (D4L), those who go through the DIL process may be eligible to rent their home back from Fannie Mae at current market rental rates. This may not sound like a great deal, but many families have ended up on the street because of foreclosure. Those who qualify for the D4L Program will be able to remain in their homes for at least 12 months. To learn more, read the entire D4L Program eligibility list.  Here are a few of the qualifications:

• No prohibitive Homeowner’s Association rental limitations
• The cost of any required repairs is an acceptable amount, based on the value of the property
• The income the lender receives from the current rental market should be expected to cover any maintenance/management costs
• The current rental rates must be less than 31% of your gross income
• The home must be a primary residence

Whether the D4L Program will help or hinder the number of foreclosures in Brooklyn New York is still up in the air, but it does give homeowners other options – something they’ve been sorely lacking.

If you’re facing foreclosure and qualify for short sale, I’d love to help. Call me Charles D’Alessandro with Fillmore Real Estate, at (718) 253-9600 ext 206 or email me at [email protected] for more information.

A recent interview with FHA commissioner David Stevens on CNBC gives hope to Brooklyn real estate owners with FHA loans. The Federal Housing Administration now covers at least 30% of new home loans, so when Stevens announced that it might not make its 2% capital reserve, people were understandably nervous. For no reason, Stevens says in the CNBC interview.

Instead of immediate risk management in the form of strict guidelines that might make it harder on potential Brooklyn real estate owners, such as those Fannie Mae and Freddie Mac have put on condo mortgages, the FHA is going for some changes. The changes include hiring a chief risk officer and requiring higher capital standards for loan originators.

Once it was out that the FHA wouldn’t meet its 2% (please note that the FHA itself is the one who broke the news), news portals, blogs and other websites spread the news that the FHA was a train wreck. However, the CNBC interview with Stevens cleared the air a bit.

It appears that the FHA, put in place for instances like this when people can’t afford other loans, actually has two capital accounts. According to Stevens, the FHA has “lots of capital in primary reserve to cover expected defaults.” Combined, FHA capital is over $30 billion dollars.

At the present, says Stevens, the FHA isn’t considering a minimum credit score, and they may not have to. Looking at their portfolio, the average credit score has gone up 60 points, from 630 to 690, pointing to a higher quality of borrowers.

So, when thinking about buying Brooklyn real estate and looking at mortgage companies, don’t forget to look at the FHA. If Fannie Mae and Freddie Mac are lending, the FHA is – and it’s going strong!

You can watch the CNBC video for the full interview.

If you’re looking for a beautiful home, I can help. Call me Charles D’Alessandro at Fillmore Real Estate now at (718) 253-9600 ext. 206 or email me at [email protected] for more information.

brought to you by Brooklyn Real Estate Sales

he Tax Guy by Bill Bischoff (Author Archive)

Published by Smart Money.com

Home Buyer Tax Credit: 10 Things to Know

Here are the 10 most important things to know about the revamped credit.

What is A 203k Rehabilitaion Mortgage?

Shopping for a Brooklyn home isn’t always so easy. After you go to a lender to learn how much of a mortgage you qualify for then research the Brooklyn neighborhood and maybe school district you would like to live in.

Now it’s time to find a Realtor to show you houses. As you look around at the houses that are for sale you find some are too big, too small ,not the right street, just right but I hate the kitchen or  the property is in total disrepair, sound familiar to anyone? Well for the Brooklyn house that is in disrepair there is an answer. 203k Rehabilitation Mortgage Insurance, this mortgage Section 203(k) fills a unique and important need for home buyers.

When buying a house that needs repair or modernization, home buyers usually have to follow a complicated and costly process. The interim acquisition and improvement loans often have relatively high interest rates, short repayment terms and a balloon payment. However, Section 203(k) offers a solution that helps both borrowers and lenders, insuring a single, long term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of a property. Section 203(k) insured loans save borrowers time and money. They also protect the lender by allowing them to have the loan insured even before the condition and value of the Brooklyn property may offer adequate security.

This option allows you to buy the handyman special and borrow the repair money needed to get the house renovated.  Now it does have a process and requirements but it’s a great way to get that perfect ugly duckling to what you want it to be. For the houses that might just need a little sprucing up like kitchens and baths there is  another option called FHA’s Streamlined 203(k) program permits home buyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this new product, home buyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.

This program is not for everyone it can be time consuming with a lot of involvement, the program is just another option to explore and an example of  the great mortgage programs out there to help buyers and sellers to achieve their goal, Remember research is a top priority. Always do you homework !

If you’re ready to buy a fixer upper or would like to know more about the 203k Rehabilitation Mortgage call me  Charles D’Alessandro Your Brooklyn Realtor® with Fillmore Real Estate a call today at (718) 253-9600 ext 206 or email me at [email protected]