Q & A with Dottie Herman

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Q1 - There is a home being auctioned near my home. It is a lovely house and I would consider selling my house and buying this home, however, how can I learn more information about this house before the auction?

A - The company that is running the auction should have a full slate of information on this sale. You can check their website or call them up directly. Before purchasing it is a good idea to fully research the home and I'm sure they can and will provide you with valuable information. 

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Q2 - I want to transfer my home into my children's name; however, I still have a large mortgage that they will now pay. Is there a way to do this?

A - First thing to consider is that just about all mortgage have a clause that sates if you remove any person form the deed that is on the mortgage then you must pay off the mortgage. This is called an acceleration clause.  The most common process to accomplish this is to transfer the property to the Children and they refinance the mortgage with a new one in their name.  Some banks will allow you to transfer the mortgage as well but it is best call them and then retain an attorney to oversee the process.

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Q3 - I currently own a home which has dropped $40,000 in value. I owe more than it is worth. I have an interest only loan, but I do not have trouble making payments. I don't have to foreclose because I'm not in financial trouble, but I would like to either sell my home soon b/c it's too small or at least try to restructure my mortgage. My mortgage company said there was nothing they can do for me - what do you recommend?

A - Since your mortgage company will not entertain a modification on your mortgage, you may have to remain in your home until the market improves.  It would not be beneficial to do short sales as this would damage your credit for future home purchasing.

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Q4 - I am refinancing and I was given a locked fixed 15 yr. rate at 4.75% and presently my rate is 6%.  The amount I am refinancing is $125,000. The house appraisal came in at $800,000, and the bank representative valued it at 650,000.  The rep told me because the appraisal was so much higher the ratio was better so they could lower my refinance rate. Now the rep said rates have increased and I have a good rate and there's nothing she can do.  This has been going on since Dec. 9. (they sat on the paperwork and I had to resubmit)   Can the bank go back on this promise to lower the rate?  I've been told I should be going to closing soon.

A - We can not speak on behalf of the bank you are refinancing through; however, in most cases once a loan is locked there is typically a fee to lower the rate.  It is called a "float down" fee. Rate-locks are typically good for 60 days. In your case, is your rate still locked at 4.75% or has it expired?   If there was no rate-lock in place, then you are subject to the current rates available.

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Q5 - I am looking to sell my home, and currently we have three offers on the property. We were just going to take the highest offer, but how do we know they can get financing? We priced our house well because we need to sell ASAP as we have been relocated for our jobs and we want to ensure that the person's offer we accept can definitely get a mortgage.

A - Some banks offer a pre-approval commitment which means the borrower is approved pending a property, contract of sale and an appraisal. With this in mind, the highest offer may not be the best offer unless the buyer can provide the pre-approval commitment letter.

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If you have a real estate question for Dottie, please send it to; Dottie@RealEstateChannel.com.
 
NOTE: Due to high volume of questions, not everyone can be answered, but she'll do her best. 

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