Your Housing Costs

Your Housing Costs

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On November 13, 2008, 6 News and WATE.com held a live online discussion to answer questions about housing costs. The following is a transcription of that discussion.


Focus on the Economy: Fighting Back (11/13/2008) Powered by:CoveritLive
5:01
WATE: 6 News wants to help you get through the current economic crisis. Each day this week, 6 News is assembling a group of experts in our studio from 5:00 to 6:30 p.m. They are available to answer your questions by phone and here in this live online discussion at WATE.com. This special effort, "Focus on the Economy: Fighting Back," will tackle a different subject each day. Today's subject is the housing market.
5:02
WATE: Joining us today is Jim Nichols, who is a broker with RE/MAX Preferred Properties of Knoxville. He will be happy to answer your questions about the local housing market.
5:05
WATE: Let's start off with a question that was submitted to us earlier via email. It's from Shirley, and she writes: My sisters house has been foreclosed on and has been sent to the court house steps. We have heard nothing about a sale? She doesnt have the money to pursue acquiring another loan on it (2000.00) What are her options to keep her house if any? Government aid of sorts and her interest was 11% surely it is possible to lower this, thus lowering her monthly payments?
5:09
Jim Nichols: You sister should get legal advice as soon as possible. Usually, certified letters are sent to the owner to let them know the forclosure sale is about to take place, including the date of the sale. There are HUD authorized housing councelors that can help. I would call the Knoxville Area Urban League for assistance. They are a HUD approved councelor, 865-542-5511.
5:12
WATE: Here's another question via email. Beverly writes: we are currently have difficulties with our mortage and have been for a year atleast, no banks or finance companys will help us. i recently heard about this fedmod.com. they are a law firm out to help people get out of trouble and refinance. i found out that you have to pay 3495.00. they are willing to work with you though, 1000 down and 1250 twice, and said they would get started when the first 1000 is recieved. my question is---do you know if they are legitament with this and do you think it is worth it. thanks
5:18
Jim Nichols: Beverly, I would recommend NEVER sending money to anyone for a service like this. Tthey most likely will take your cash and do nothing. The $3495 can best be used to catch up on your mortgage if you are behind. There are local HUD approved housing counselors that charge NOTHING for thier services. Call your lender back first, as the Federal Baliout may be able to help. You may also want to call the Knoxville Area Urban League for assistance, 865-524-5511, as they are a HUD approved agency.
5:27
[ Greg] Anyone facing foreclosure should never take it lying down. Many times there are defects in either the original loan documentation, or the foreclosure procedure that can be exploited to gain more time to either move, or refinance.
5:30
Jim Nichols: Greg, you are correct. The last thing lenders do not want to foreclose. There are several HUD approved counselors who provide assistance at no charge.
5:36
WATE: LaTonya wrote us with this question:I had to file for bankruptcy chapter 13… I have been discharge from it…In this process I found out I have a balloon payment on my home…My attorney advise me to refinance my home are try to pay it off…My pay off is $40,000. I tried to get my home refinance through the company that I had it finance with and they said, my credit score was to low… Can you please advise me on what to do?
5:41
Jim Nichols: LaTonya, if your credit score is low, you may not be able to refinance right now. It does not take a very long time to raise your credit score if you make payments on time. I would recommend calling several reputable lenders and have them review your situation. A good lender will also be able to provide advice on how to raise your credit score. Continue to make payments on all of our debt to raise your credit score and refinance later.
5:43
WATE: If you are just joining us, we are answering your questions about the local housing market. Our expert is Jim Nichols, who is a broker with RE/MAX Preferred Properties of Knoxville.
5:45
WATE: I have a condo that I have tried to sell and rent. No luck. I need the payment to be lower but I filed bankruptcy in Feb. I owe 96,000.00. The condo is worth around 140,000. They are charging PMI. Is there any way to get rid of that? Is there any way to get a lower payment?
5:47
WATE: I'm sorry, I should have mentioned that the last question was submitted to us via email by Debbie.
5:48
Jim Nichols: Yes, you can get rid of the PMI. If you have a conventional loan (not FHA or VA), you can have your home appraised, and if your loan to value is 80% or less, your lender will remove the PMI. If your loan is FHA, the only way to remove the PMI is to refinance with a conventional loan.
5:50
WATE: Here's a question from Bill: Difficult to make monthly payments and in a forebearance agreement with mortgage company; attempting to sale, but offers are less than current mortgage balance and mortgage company not responding to "short sale" offers.....any advice? Also: mortgage/loan payment includes PMI payment....how does PMI effect foreclosure? Look forward to your answers and advice
5:55
Jim Nichols: Bill, Let's talk about the last question 1st. PMI will probably have nothing to do with a possible foreclosure. About the first question.... Your mortgage company (has to) respond to any offers. I think today they are taking their "sweet time" to see if they can get some of the Fed bailout dollars to reduce their loss. I would keep calling them again, and again, and again till you get a response.
6:09
[ Shirley] Our finances are very tight right now due to 3 months on disability paythis summer. My husband is retired so mine is the main income. I called our credit union about an extension & she suggests refinancing. We currently have a flex 5 & that's what she recommends staying with. My hesitation comes from the first 10 years where most the payment goes to interest. Yet, we are going to have to do something as our house payment & utitity bill are over 600.00. Is refinancing under another flex 5 a good idea?
6:13
Jim Nichols: Shirley, a good fixed rate is always best, so your payment will never change. Most credit unions are pretty good, and that may be your best option. I would call several lenders to get a comparison. About the interest only for the first 10 years, you can always pay additional on the principal if you have extra income at times. I would ask your credit union if you can make less than interest payments for a few months. They may do that.
6:13
[ Frances] I have a 1st and 2nd mortgage. I was notified early this month that my second mortgagee is transferring my loan to another company. I called the new company was told that they will only service my account and if wanted to request a lower interest rate they would not be able to help me. I pointed out to the new company that I have never been late on my first or second mortgage
6:16
Jim Nichols: Frances, many companies really do just service their loans and have no authority to do a refinance. I would suggest shopping other mortgage companies to see if a refinance may be a possibility. There are many good lenders in our area.
6:19
[ Sarah] Can you give any information on predictions for the housing market in the Knoxville area? I'm interested in knowing how long we should wait before attempting to sell our house in the Northshore area.
6:22
Jim Nichols: Sarah, depending on your price range, now may be the best time to sell. the higher the price, the fewer the buyers in the market. Honestly, homes are selling now. We are off about 25% in the West Knox area. That means 75% are still selling. A really good market evaluration should be done by your agent.
6:22
[ Alice] I live in KY and my mortgage is with a local bank. A few years ago, I refinanced two loans to have just one mortgage payment, my credit was bad and I had 2 liens on my home. The bank did the refinance but my interest is 11.5%. I wanted to refinance a couple of years later and the bank said my credit was good now, but they wouldn't do it because of the liens. Is there anything I can do?
6:23
WATE: We have a couple more questions waiting and we should be able to get to these, but we are almost out of time for tonight.
6:24
Jim Nichols: Alice, I would talk to several mortgage companies. 11.5% is extremely high. You should be able to do better. Call several lenders.
6:24
[ shelia] Can I find a new house about 2000 square foot for under 100,000.00? thanks Shelia
6:26
Jim Nichols: Sheila, you should expect to pay a minimum of $70 to $120 per SF for any decent house. $70 x 2000 = $140,000. You might get lucky, but I would not count on it.
6:26
[ Alice] What about the liens?
6:27
Jim Nichols: Alice, all liens must be paid. Ask your lender about including them in the refinance.
6:28
[ Guest] Im 36 years old the best way to owna house without a morgage is to save and pay cash i started saving when i was 17.. You got to save for things they you really need. Worst thing in life is when you need money and everyone turns you down. Guess family tought me to be tight but im glad they tought me that. Dont have to worry about a house payment or the bank taking my house atleast even tho its under 100,000
6:29
Jim Nichols: Guest, if you can pay cash that is indeed the best way. I would consider a mortgage as an "investment" as opposed to "debt" when buying, as an example, a car.
6:30
WATE: Thanks to everyone who joined us tonight. We have time for just one more question.
6:30
[ Jack] Will an FHA loan with a fixed rate exer decrease?
6:31
Jim Nichols: Jack, the rate will always remain the same (fixed). this is the best type of interest rate.
6:31
WATE: Special thanks go to Jim Nichols of RE/MAX Preferred Properties of Knoxville. We appreciate his time and expertise.
6:33
WATE: Join us again tomorrow from 5:00 to 6:30 when we answer questions about credit card debt.
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