Q & A with Dottie Herman

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Q1 - I recently put an offer in on a house. Since then my husband lost his job and we are not sure if we can still get a mortgage based on my income. We have a lot of money in the bank and we can still afford the home, however, we are not sure if we can still take as large of a mortgage from our lender. If the seller offered us a second mortgage, would that be an option? What are some things we should think about before taking a second from the seller?  

A - The first thing to consider is whether or not you can afford the house without your husband's income.  If you are comfortable, you can consider a mortgage from the seller, however this may not solve the issue of qualifying since the mortgage lender will require all of the information on the seller's mortgage to be considered and documented as part of your approval.  There is no real negative to having a mortgage with the seller and in most cases there are fewer closing fees involved.  Do make sure you have an attorney handle the details and paperwork for the mortgage with the seller.

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Q2 - I have currently defaulted on a few of my mortgage payments. How long does it take for a home to go into foreclosure? Can I sell my house before the bank really comes down on my wife and I? What can we do to prevent a larger problem?

A - Foreclosure time varies from state to state depending on the process and how busy the courts are. You may sell the house or pay the monies due the bank right up to the day of a foreclosure sale, because you still own the house.  When trying to sell the home while it is in foreclosure, remember that you will need your bank to allow it as a "Short Sale" if the amount you are selling it for does not cover the remaining balance of the loan.  

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Q3 - My wife and I are currently in contract on a home and we have locked in a rate. Things are moving slower than we would have liked and we are having some challenges scheduling the closing. We need to extend our rate longer; however, it has already been 60 days. Can we do that? If so, what is involved?

A - All lenders have the ability to extend and even renegotiate your rate to a lower one if current rates are now lower than when you applied for the loan. Rate lock and extension policies vary from lender to lender so check with yours to find out.  There is always a charge for this as well so you will have to decide if it makes sense for you.  If you have time you can always consider starting over with a new lender to get a new rate and lock-in, but you will be starting over and forfeit any monies you have already paid to your current lender.

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Q4 - I am selling my home on Long Island. We have buyers who are interested but they are first-time buyers. They have decent jobs and income; however, they didn't qualify for enough of a loan. I do not currently have any financial troubles - would there be a benefit for me to hold their mortgage? How would I go about this?

A - Holding the mortgage for your buyer can be an excellent investment and is worth considering.  I suggest you first consider if the return to you is what you desire and what time-period the mortgage will be for as you cannot get this money back for the term on the loan.  It is always a good idea to consult with and retain a Real Estate Attorney to do this with you.

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