Q & A with Dottie Herman

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Q1 - Allegedly there is a home in my neighborhood that is in foreclosure. We haven't seen anything about it in the papers, nor heard anything about an auction- how would we get information on this home as we are very interested in purchasing it as an investment?  
 
A - There are websites available that track real property that have a legal action against them by a lender.  One of the most popular is www.realtytrac.com.  You can search by zip code and it will show a map and in many cases the address.  Since this information is public record it is also available in the government offices that handle the recording of legal documents into the public record.  You can go and research the property yourself, but it may be easier to pay a local title insurance company to do the search for you.  You can find a title company in your local directory and they will normally have the information to you in a day or so for a fee.

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Q2 - I am in contract on a home and we should be closing within the next few weeks. Our lender wants us to take private mortgage insurance, but I thought that was for loans with less than 20% down, and we put 20% down. Do we have to do this? Is this standard across the board? 
 
A - Private mortgage insurance is not required when making a down payment of more than 20% of the appraised value.  The bank may be asking for PMI if the appraisal on the house came in lower than the contract sales price.  If this is the case, then you also have the option to increase the amount of your down payment to bring the mortgage loan back to 80% of the appraised value.

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Q3 - My husband and I have been living in our home for many years and we have a small mortgage balance left. How do we know if we are eligible for a cash out refinance? We could really use some liquid money right now.  
 
A - The first criteria is that you have equity in your home to access. You indicate that you have a small mortgage remaining so you should OK.  Banks will lend you as much as 80% of your home's value in a new Mortgage. For example, if you have a $100,000 home with a $20,000 existing mortgage you can get a new loan amount of $80,000. After paying off the existing mortgage and some closing costs you would end up with approximately $55,000 cash out for your use.  Please remember you still must qualify for the new loan based on your credit profile and income.

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Q4 - I have been living in my home for 7 years. Our current interest rate is 7% and we would like to refinance. Our credit score was great when we bought the home but we have encountered some financial hardship since then. We have some debt and our credit scores have gone down significantly. Would we qualify for a lower rate? This rate adjustment would make our payments lower and essentially help us pay, however, we aren't sure we can refinance if we have to re-qualify.
 
A - Your credit score is a significant factor in your ability to qualify for a mortgage loan as well as impacting the rate available to you.  Mortgage loans are available with credit scores as low as 600 if you have strong income, employment and savings. It is best to work with a local lender to have you pre-qualified for a loan based on your specific information

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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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