Lets say I owe $358. Lets say the bank accepts a short sale of $300. What happens with the remainder of the $58,000? I know I get taxed on it, but I am not responsible to pay that right?

Also, what happens to the equity line that is with it if it is not paid? Do they come after you for what you owe on that?

I am currently locked into an interest only, land-contract in attempt to buy my first home. I have very shaky credit, FIA score of 563 but have been settling old accounts for a year to raise it up. When I started the process I was told I needed a minimum FICA of 580 to secure the loan through FHA with only a 3% down-payment. Are the guidelines the same? Are the loans also harder to get now with Freddie and Fannie gone?

I am trying to google foreclosure homes in my area of Evansville, IN and every site that I come to wants me to become a member and pay to view the information. I know there has to be an easier way to search for these properties. Any ideas?

Have you been looking for financing on a new home, but struggling to find anything reasonable? With subprime mortgages a thing of the past, if you have less-than-perfect credit an FHA loan may be just what you need. An FHA loan is a federal assistance mortgage loan, backed by the Federal Housing Administration that insures lenders against loss, in case the borrower is unable to meet the terms of the loan. And because it provides protection to lenders, it allows borrowers to purchase a home who might not otherwise be able to do so, at a reasonable rate.



Created as part of the National Housing Act of 1934, when defaults and foreclosures were on the rise, the FHA was designed to facilitate various loan insurance programs, as well as increase home production, and provide jobs. The FHA doesn’t directly make loans, or build houses, but rather oversees these things on a broader scale, and of course, provides insurance to lenders.



Due to the wide availability of Private Mortgage Insurance companies these days, FHA loans aren’t being utilized quite as often as they were in the days of their inception, and tend to best serve lower income Americans, who may otherwise find it difficult to acquire private mortgage insurance, or are unable to provide the necessary down payment for a conventional home mortgage.

Typically, when applying for a loan, the lender will ask whether or not you’d like to apply for FHA loan insurance, and if so will guide you through the application process. The FHA then evaluates the borrower, based on several factors including debt-to-income ratio, as well as credit history. If they find the risk to be acceptable, they will then insure the lender in the event that for any reason you fail to meet the terms of the loan. The borrower typically pays a premium for the insurance, of one-half of one percent.

There are several ways this situation benefits you. First off, you receive an expert appraisal by an official FHA appraiser, assuring an accurate valuation, so you won’t have to worry about paying too much for your new home. Also, because the lender has the extra peace of mind provided by federal insurance, they are typically willing to allow you to borrow at a much lower rate than had the FHA not agreed to provide insurance for your loan.

The FHA also administers various programs with special features, such as the ability to insure adjustable rate mortgages (ARMs). What sets adjustable rate mortgages apart from regular home mortgage loans, is that the rate is adjusted every year allowing borrowers to refinance or purchase your home at potentially a lower rate than the initial loan rate. In 2006, the FHA was even approved to insure hybrid adjustable rate mortgages, in which the rate is fixed for the first 3 or 5 years, and then is adjusted annually.

As I mentioned, the FHA doesn’t directly make loans. What this means is that different lenders offer different terms, and different rates. Some are very competitive. Some aren’t. It’s important for you to shop around. Call lenders and inquire as to whether or not they originate FHA home loans. It might take some time, but doing a little homework will make a world of difference to your financial future.

After owner builders work their way through the maze of owner builder construction loan qualifying, it will be time to close on the loan. This is essentially where you sit down and sign a huge stack of documents that you will never read, or understand if you try.

Basically, this is where the owner builder loan promises to give you the money, and you promise to repay it. Sounds simple, but it will take a hundred or so pages to accomplish it.

Owner builders are typically free to choose any closing agent to conduct the closing. In most states, owner builders can choose either an attorney or a title company to perform this function. Some states require you to use an attorney.

Once you sign all the documents, the closing agent still must record them with the county registrar, making the owner builder construction loan official. This is usually the day after your signing.

During construction, as an owner builder requests specific loan draws, the lender will most likely request the closing agent to do periodic updates of the title to make sure no liens have been filed to date.

Most good owner builder construction loans are one-time-close, construction to permanent loans. Once you are finished building, there are no more closings to convert to your permanent mortgage. At this point most lenders simply send you a final loan agreement with the final loan amount and interest rate and terms for your signature. There should be no need to go back to the closing agent again for a second round of document signing if the owner builder loan is set up properly.

Owner builder loan closing costs typically consist of three components: broker/lender fees, loan fees, and third party fees. Remember two things about closing costs when considering owner builder financing.

First, closing costs for construction loans, in general, and owner builder construction loans, especially, are going to be slightly higher than costs for a plain purchase or refinance mortgage. Accept this and shop for the loan that best fits your needs. Do not waste your time looking for an owner builder construction loan that has the same terms as the refinance loan you did two years ago. Do not try to compare apples to pineapples.

Second, just because an owner builder construction loan has slightly higher costs does not mean that it is not a great deal. Remember the big picture. You are considering being your own contractor to build the exact home of your dreams and save tens of thousands of dollars doing so.

If your research shows that you can save, for example, $65,000 by being an owner builder, is it no longer a great deal if you only save $63,000? How about $58,000? $53,000? Realize that you are still saving a ton of money while building your dream home, despite the slightly higher financing fees that come with owner builder loans.

Brokers earn their income on owner builder loans by charging origination fees for their service. This is a percentage, called “points,” of the loan amount. One point equals one percent of the loan amount. By charging an origination fee, the broker is able to give you access to a lender’s wholesale rates. The broker is also able to represent you and your best interests by offering access to a variety of loan programs.

Working directly with a lender is also occasionally an option. Direct lenders are typically compensated the same way as a broker; by charging points.

Perhaps the best option is working with an organization that has expertise in owner builder loans, that is a direct lender, and that also has the option of acting as a broker when needed. This will give you the best of both worlds while ensuring you are working with a specialist.

The number of points you should expect to pay will vary by loan program and lender. For very specialized loans such as owner builder construction loans, it is common to pay approximately two to three points in total fees. This is a small price to pay for access to a program that will allow you to save tens of thousands of dollars while building the home of your dreams.

In addition to broker or lender fees, your loan’s closing costs will include loan fees. These fees include items such as underwriting, document preparation, draw administration, loan processing and a variety of the other small fees. For a construction to permanent loan (remember you are getting two closings in one), expect to pay approximately a half to one percent of your loan amount in total for these fees. Most of these fees are fixed amounts, so the percentage will be higher for lower loan amounts.

The third component of your owner builder closing costs are made up of things the lender or broker has no control over, hence the name “third party” fees. Third party fees are also, for the most part, not affected by the type of loan you choose. They are, however, influenced by the size of the loan. Third party fees consist of your closing agent’s fees, title search and title insurance fees, recording fees to the state, county or locality and any state or local taxes. Most of these items are set by the state and local governments and are simply the price of buying or owning a home in that area.

All told, owner builders can reasonably expect to pay approximately two and a half to four percent of their construction loan amount in closing costs. Some states may have high transfer taxes, excessive title insurance fees or other high state or local fees that will increase your costs.

Overall, the total closing costs are not bad when you consider you are closing on two loans in one and being given a loan to undertake a process most lenders consider extremely risky. Plus, owner builders get to build their dream home while saving tens of thousands of dollars.

The reality of buying a home is this: you will likely need a mortgage. There are those people out there who have the ability to pay cash for a home but that is by far, the minority. Homes are more expensive now than ever before, partly due to the rise in building costs and the increased demand for homes in this country. Along with this increased demand has come every flavor of lending from the traditional mortgage to shady loans that have left home owners floundering. When buying a home it makes simple sense to investigate your mortgage and lender to ensure that you are getting the the best loan possible and are not getting taken for a ride.

The traditional home loan is what’s referred to as a fixed rate mortgage. These loans are usually amortized over a fixed period of time, say 30 years. They also have an interest rate that is attached to them that dictates the fees and money that you have to pay in order to borrow the principal amount. Fixed rate mortgages are by far the best way to finance over a long period of time as the fixed rate ensures that your monthly payments will be the same over the period of the loan. This allows a borrower to figure out a monthly budget based on their regular fixed payments and gives a strong base to any financial planning.

Variable rate mortgages work very well when the interest rates are low, however they can change over the course of time. Interest rates fluctuate and if they happen to take a steep climb, you can very easily see your monthly payments increased to a level where the payments become uncomfortable or even unachievable. These loans are very attractive in the right market but if the market changes as they are wont to do you could find yourself in a financial fix.

Then of course there are the fly-by-night lenders. The first step that you take in securing a mortgage should be to compare quotes from many different sources and then once you have narrowed it down, investigate the lenders. It is critical to find a lender that has a good reputation and business track record. If you research a lender and they have only been in business for a year or two you may not want to commit to them. this country has seen no shortage of mortgage scams and the last thing you want to do is find yourself the victim of an unscrupulous lender. Take the time to research every aspect of the lender and the loan and then make your decision based on solid facts.

There has been a horrible amount of false and fraudulent business practices enticing people into really bad mortgages, who then got foreclosed on. How many did this happen to, and anyone have ANOTHER company scam them by saying they would help them out, when they just wanted to help THEMSELVES out at your expense ???

what is the best way to remove negative items from my credit report and boost my fico score. i have late payments on there and a bankruptcy from 7 years ago and now i have no outstanding bills , but my credit score is still low , how is the best way and the fastest boost the score

When you Go through a short sale are there any benifits from that when you do your taxes at the end of the year? can you claim the loss?

My husband and I are 30 and 31 and have 3 kids. We’ve owned our home for 7 yrs and owe 65K plus a 40K equity line. We have no other debt except our 2 car loans. Our house is now worth at least 130K as is. We are having plans drawn up to add a second floor with our own money but would like to know the best place to get a construction/permanent financing loan for the addition. Our credit scores are 787 and 740 and my husband makes 65K a year and I make about 30K working from home. I’ve heard some online banks have great rates or would it be better to go with our mortage co. (WAMU) or the credit union we have our 2 car loans and equity line from? **Plus, my husband is a General Contractor and will be doing most of the work himself. Will that affect the payouts? Thanks!