Mortgage Blog

If you bought your home in the last couple of years and you put little or no money down then there is a good chance that you owe as much or more than you home is worth. When you owe more on your home than its current value this is called being "upside down".

But what if you need to sell. Maybe you are being relocated by your employer or you find you just can't manage the payments any more. Foreclosure or Bankruptcy are not the only options There is another choice. Some Lenders are will to accept less than the full balance due on a mortgage. This is called a "Short Sale".

Your first step should be to find out what your home is likely to sell for. Contact a good local Realtor and they should be able to answer that question. Next you need to factor in any potential Realtor commissions and closing costs etc. Deduct these costs from the expected sale price of your home and now you know what you can expect to net. If that figure is less than what you owe you might consider contacting your Lender to see if they will accept a short sale.

But don't take this for granted. Many Lenders will not agree to this course. Some others will still hold you responsible for paying back the difference at some point. You should know that there can be legal and tax implications to accepting a short sale so as always contact your lawyer and tax accountant before taking this drastic step.

We are delighted to announce that we have now teamed up with Indy Mac Bank to offer an exciting new product for our senior citizens.

If you are 62 years of age or older and have equity in your home, a reverse mortgage can turn that equity into cash, monthly income, a line of credit or a combination of the three. Unlike a traditional mortgage, you are not required to make any monthly mortgage payments, there is no income qualification and the proceeds are tax-free*. Best of all, you retain ownership of your home and can live there for as long as you choose.

The funds can be used for anything, including:

• Pay off an existing mortgage and other debt
• Long term healthcare and prescription drugs
• Property taxes
• Home repairs and renovations
• Cash reserves for emergencies

If you would like more information about this program please visit the reverse mortgage page on this website.

* Consult your tax professional to determine the tax effect of a reverse mortgage

A Mortgage Escrow Account is established to pay on-going expenses while there is a loan on the house. These expenses include property taxes and home insurance (also sometimes mortgage insurance and flood insurance). Generally, the Escrow Account is partially funded at closing and the home buyer makes on-going contributions through their monthly mortgage payment.

The amount to be collected is calculated in the following manner. Total of annual costs divided by 12. For example if the insurance premium is $1,000 and property tax $2,000 then the monthly amount to be collected would be calculated as follows: $1,000 + $2,000 divided by 12 = $250 per month.